What Are the Factors that Generally Affect Your Car Insurance Premium?

Most people who have gotten a speeding ticket know what it’s like to see a spike in their monthly premiums. Whether driving for business or pleasure, it inevitably involves paying insurance rates based on your driving history and other factors. Here’s a deeper look at the various factors that determine your car insurance premium.

Your Car

The year, make, and model of your vehicle and its features all significantly impact premium costs. If it’s a brand new car, count on paying a higher car insurance premium. New cars are often targeted by thieves who steal and sell the parts to different unsuspecting people. If your car has inbuilt safety features like anti-theft devices, you may have to pay a lesser premium.

Your Driving Habits

Every driver on the road develops a driving record that insurers use to gauge risks. A good driving record is one way to prove to your insurer you’re a safe, low-risk driver. Another way is to document your driving behavior with a telematics device digitally.

  • Driving Record

    The more accidents and tickets you rack up, the higher your insurance costs will be. Your insurer may eventually cancel or not renew your policy if you keep filing claims.

  • Your Mileage

    The amount of mileage you drive matters because the more you drive, the more risk you’ll have of getting into a crash. One way to lower your monthly premium is to notify your insurer you are driving less.

  • Demographic Factors

    Various aspects of a person’s identity are reflected in demographic information such as zip code, age, and gender. Even at a young age, males get into more wrecks than females. Both the youngest and oldest driver groups pose the greatest risks of claims for insurance companies to pay.

  • Where You Live and Usually Park Your Car

    The reason your residence matters is because insurance companies look at crime rates in each zip code. High-crime areas present higher risks to insurers, leading to higher premiums. Typically, urban neighborhoods are more prone to accidents, vandalism, and threats than rural areas. Wherever you live, it’s best to park your vehicle in a secure place like a garage.

  • Your Age and Gender

    Teen drivers get into more accidents than any other age group, mostly due to lack of experience. That’s why teens pay the highest insurance rates but usually start getting breaks by the time they’re 18. A student who gets good grades can also get an insurance discount.

The Auto Insurance Coverages, Limits, and Deductibles You Choose

You can make easy adjustments from time to time on coverage limits and deductibles. The amount of coverage you choose and what you pay upfront after filing a claim before receiving benefits might change over time.

  • The Type of Coverage

    Different types of auto insurance coverage are available, such as comprehensive and collision insurance, each with its own premium rate. Lenders may require the policyholder to carry a specific amount of auto liability coverage.

  • Your Limits and Deductibles

    It’s up to you to decide if you pay more money for your monthly premium or later when you file a claim. The higher you set your deductible, the less you’ll pay monthly. Conversely, the more you pay monthly, the less you’ll pay from your own pocket before the coverage pays the rest.

Auto insurance is pretty straightforward in terms of basic plans. When you need special coverage, you must be careful to get the precise coverage you need. Contact our auto insurance experts at Family Financial Insurance Group for more information about getting the best deal on a car insurance premium.

Comments are closed.