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Some key factors that determine the rates


Auto owners’ insurance is an absolute necessity not because the state laws prescribe a minimum amount of insurance but because it is essential for our own self protection in the event of a mishap.  Not too many people have realized the importance of auto insurance and there are many who are still procrastinating.  The main apprehensions that people may have is with regard to the insurance rates.  In order to get a better understanding, it is imperative to know the key factors that determine insurance rates.  There are also ways and means where one can get insurance at an affordable price as well as adequate coverage.  Some of these factors are listed below.

It is a well known fact that the insurance rate for a new driver is always a little higher than the rates for someone with enough driving experience.  The other main factor is that the credit rating of a person plays a crucial part in the auto insurance rates and most people are not aware of that.  For someone with a good credit history the insurance rates would be much lower than for those with fair or poor credit rating.  This is due to the fact that insurance companies regard those with poor credit scores as high risk groups as there is a perceived lack of responsibility from their end with regard to managing finances.  If this is an issue then one must work towards improving the credit rating to get a chance to lower the insurance premiums.

The safety features that are installed in a car also play a very crucial part in the insurance rates.  Hence, people are advised to install these safety features if the vehicle does not have them.  While some of these features are installed in the vehicles by the manufacturers themselves, but if it has not been done then it would be wise to get them installed.

The type of vehicle that is to be insured is obviously going to determine the insurance rates.  Common sense would tell us that insuring a sports vehicle would cost much more than the any of the regular models.  This is due to the fact that sports vehicles are generally going to be driven at higher speeds when compared to a family vehicle such as a station wagon, for instance.  There are many other features that will determine the insurance rates.  But these are the main factors that will have to be considered.