There are a lot of variables that determine the auto insurance rates that a person might get. And it all boils down to numbers when it comes to calculating your rates. Numbers never lie is always the policy that insurance companies follow when calculating your rates.
Firstly, they will look at your driving record. A speeding ticket or a rash driving ticket can adversely impact your insurance policy. If you have multiple tickets, you could be looking at a doubling of your insurance rates. There are certain types of infractions that can cost you more than a speeding ticket. A DUI or driving under the influence ticket is a criminal offense and it can prevent you from retaining your driving license and hence your current insurance policy. Reinstating your policy will require you to take up special driving classes and alcoholics programs.
Your auto insurance rates are also determined by the type of vehicle that you drive. The newer the vehicle, the higher the costs will be. A few vehicles are considered high risk if they are prone to theft. Sports vehicles are also considered high risk as they are known to have a tendency to make drivers speed up. If you buy a sports car, you are most definitely not going to run it at a fraction of its speed capabilities all the time to remain inside the speed limit.
Next, a person’s age is another important factor. If you are a young driver with no driving record, you could be looking a very high rate. Any driver between the age group of 16 to 25 would fall under this category. Even if you are an older driver over the age of 55, your insurance rates would go up as statistics show that such drivers are more prone to commit judgmental errors due to slower reflexes.
Fourthly, it has been found that married couples are safer drivers. People with families have more to lose than a bachelor. They have a home, job, and family and hence would be more careful while driving. Youngsters are known to go for cheap thrills and indulge in experimentation. Hence a married individual would get better rates.
Lastly, where you reside will decide your insurance premium cost. In cities, you would pay more as it would cost more to repair your car. It would also cost more for the insurance company to run its day to day operations. There are also other criteria that are location dependent like weather, road conditions and accident rates. If you live in an area which is more prone to snow storms, you are more likely to be involved in an accident related to poor visibility or bad road conditions. In a big city like New York, bumper bends are way too common and are factored into the premium cost.
Insurance companies spend a lot of money on risk analysis. They employ full time statisticians and scientists whose only job is to speculate about impending disaster. It is always better for you to understand why and how you might end up paying more so that you can take steps to reduce the cost.
