Determining Auto Insurance Premiums
Auto insurance companies review several factors to determine your auto insurance premiums. Each insurance provider may price their auto insurance rates differently according to each factor. Be sure to compare multiple insurance quotes to get the best rate. Insurance providers also look at the following attributes in addition to the amount of insurance coverage you need:
- Your car - A more expensive car is also more expensive to repair and so will cost more to insure. Additionally, insurers may view sport cars and cars with higher horsepower as more riskier to insure, leading to higher premiums.
- Your location - auto repairs are more costly in some locations than others and some locations have a higher likelihood of accidents and auto theft. These factors can lead to a higher monthly insurance payment.
- Your driving record - drivers who have a history of accidents or traffic violations often pay a higher premium. Drivers with fewer years of driving experience also normally pay more than the average.
- Miles driven per year - individuals who drive fewer miles per year may pay less and qualify for a low mileage discount.
- Your age, gender, and martial status - statistics have shown single males under the age of 25 have a higher risk of an accident. Because of this, expect to pay more if you are in this age group.
- Your credit rating - insurers often use credit rating as an indicator of risk. Individuals with lower credit rating tend to have more auto insurance claims and accidents. If you have a poor credit rating, your auto premium may increase.