There are several factors that go into figuring out how much your car insurance costs. One of them is the insurance company you choose. Thankfully, an insurance comparison tool can help you search through policies from multiple insurance companies. Use our free tool today to start comparison shopping.
Factors that Determine Your Insurance Premium Rate
According to the Insurance Information Institute, the average 12-month car insurance premium is $800. the factors vary, and some drivers pay more. Some pay less. It depends on your insurance company’s specific formula for calculating rates.
- Age – Being under the age of 25 generally means higher car insurance premiums. Being over 50, generally results in lower car insurance premiums.
- Driving record – If you have had a lot of accidents, filed a lot of claims or incurred several traffic violations, your insurance rates will be higher.
- Gender – Women tend to have lower rates than men because they statistically get into fewer car accidents.
- Make, model, year of your car – Newer cars cost more to insure than older cars. Insurance companies also look at the theft rates for your type of car and whether or not it is considered a sports car.
- Number of miles you drive – Driving a lot of miles each year means that you are on the road longer and more prone to getting into an accident.
- Type of insurance policy – The type of insurance policy you purchase will affect your rates. Liability policies generally cost less than collision coverage.
- Your credit score – Your credit score is used by some insurance companies in an effort to determine how likely you will be to file a claim. In general, if you have a low score, you are considered more likely to file an insurance claim, and your insurance premium will be higher.
- Your location – Individuals who live in rural or low crime areas pay less than individuals who live in high crime areas or densely populated areas.
- Your insurance company – Different insurance companies use different metrics and formulas for calculating their policies. This means that the exact same policy could cost less with a different insurer. To find auto insurers that offer more affordable policies, use a comparison tool.
Factors that Can Lower Your Insurance Premium
The type of car insurance policy you purchase can affect the cost of your premiums. State minimum insurance policies are generally the cheapest, but they may leave you financially liable if you are determined to have caused an accident and the damage amounts are more than the limits on your policy.
Liability insurance covers the other driver if you cause an accident.
A liability only auto insurance policy does not pay for your car repairs or medical bills.
Since the limits are higher than state minimum insurance policies, they are generally more expensive. However, they are still cheaper than full coverage car insurance.
Full coverage car insurance is a policy that includes liability, comprehensive and collision insurance. When you purchase a full coverage insurance policy, it pays for your vehicle and the other driver’s vehicle if you cause an accident. Full coverage policies are the most expensive type of insurance policy. However, you can lower your monthly rates by increasing your deductible amount.
Car insurance companies offer discounts for drivers that meet certain criteria.
- Personal use – Driving fewer than 5,000 miles each year can qualify your vehicle as a personal use vehicle.
- Good student – Maintaining a high GPA while you are in school can help you lower your insurance rates.
- Multi-line or multiple cars – Having multiple insurance policies or insuring multiple cars with the same insurance company can save you money on your insurance premium.
- Getting Married – Married drivers are considered less of a risk than single drivers.
- Working in certain professions – People who are in certain professions, like teachers, nurses and individuals in the military, are considered a lower accident risk.
Searching for an Insurance Policy
When you search for car insurance, it is very important that you research. The first step is getting multiple quotes from multiple insurance companies by using a comparison tool. Car insurance comparison tools compare your information and insurance needs against insurance policies from several insurance carriers.
Once you have your quotes, read the details of each policy and compare the prices against your budget and needs.
Determine which policies would best benefit you, then read reviews of each carrier. This will help you understand the insurance carriers’ customer service standards and claims processes. Lastly, choose your policy and purchase it on-line.