Car insurance premiums can be a burden on the pocket. Nevertheless, to shirk auto insurance is not an option. What you can do instead is to study the important factors that affect car insurance premiums the most.
Once you have adequate knowledge of these determinants, you can work around them to ensure that you pay less towards car insurance without compromising on coverage. Below are six important factors that contribute to the amount of Car Insurance premium that you pay.
- Personal Factors Even before you get behind the steering wheel, personal aspects affect how much premium you pay. Women pay less than men by virtue of being statistically safer drivers. A married person is charged less than someone who is single, even if they have similar driving records. Your age may also push costs either up or down: while drivers under the age of 25 pay the highest premiums, those aged between 50 and 65 years pay the least. Students with good grades are often rewarded with lower premiums as are folks with good credit scores.
- Insurance Location Geography matters immensely as far as your car insurance premium is concerned. Where you live will have a big impact on the insurance rates offered to you. People who reside in places where traffic is low benefit from lower premium rates than do people living in big cities and busy suburbs. This is because the insurer equates higher traffic with an increased risk of accidents, and therefore, of a higher likelihood of insurance payouts. People living in areas where vehicle thefts are common will also have to shell out more by way of insurance premiums.
- Driving Record Insurers love people with good driving records. The amount of insurance you pay on a given vehicle is directly proportional to the number of traffic violations that you have to your name. Insurers will also take into consideration how long you have been a licensed driver. If you tend to collect speeding tickets regularly, you might want to get this in check.
- The Vehicle The car that you drive has a big say in your car insurance rates. Is the vehicle likely to be stolen? What are its chances of being involved in an accident? Insurers consider such questions while providing auto insurance. Owners of SUVs and sports cars have to pay higher premiums on their vehicles, but so do the owners of less expensive cars that are statistically proven to be a favorite among car thieves. Introducing additional features like anti-theft devices will also keep your premiums down. High safety ratings will result in lowered premiums as well.
- Driving Habits Putting the car to commercial use will push up car insurance rates. So will factors like the distance between your home and your workplace, the distance driven per year and whether multiple drivers use the vehicle. On the other hand, if you own more than one vehicle, you could push down your combined premiums by getting the additional cars insured by the same insurer.
- Coverage and Deductibles Finally, it will all come down to the kind of coverage you seek. Third party coverage alone is cheaper, but provides inadequate risk protection. Additional covers will provide a hedge against the risks but will inflate your premium. A higher deductible, however, will bring down your insurance costs.