Every automobile insurance company has different methods for obtaining rates for the customer. They do follow general guidelines, however.

                The most important factor in the process is claim frequency. This doesn’t mean how many times you’ve made a claim. What it is is a measure of how often an insured event occurs within a group relative to the number of policies contained in that group. People who share these characteristics will be charged more for insurance coverage.

                There are other, lesser factors, however. Starting with your driving record – drivers with previous violations or accidents are considered to be “high risk” and their premiums are affected heavily. Your location is also a factor. Urban areas have more significantly more claims than rural areas, and so your premium may be higher. Your gender, age, marital status, are all factors as well. Married people, people over 25, and women have lower premiums on average than males, unmarried people, and people under 25.

                Your prior insurance coverage is considered as well. If you have had insurance canceled in the past for non-payment, or let insurance lapse for a long period, the insurance company may give you a high premium, or even refuse you coverage.

                Your vehicle is a big factor as well. How often you use it (how many miles are on it), the type of car and its safety rating, the year it was manufactured, even the color, all factor into the cost of your insurance. Luxury cars have lower premiums than sports cars.

                Bear to mind all of these factors when looking for car insurance, to get a general idea of how much you are going to pay.

Filed under: Getting Discounts