Do you know why does your auto insurance premium is so high compared to others that you know? It might be because that you are still a college student, you are a male, or etc.
If in case you aren’t familiar with the factors that providers use in order to scale what premiums to give you. Then here are some factors that companies use: age, driving history and type of vehicle.
The factors mentioned above, might not look like related or significant at all (that may be your opinion). But for auto insurance companies, they do. They are very much related and very much significant keys in computing premiums.
You may wonder how these factors help. Here’s the rationalization of providers to each factor:
When talking about age and how providers do use these to gauge their client’s premiums is simple. For they see teenagers who depends more on their parents to be less responsible than adults with careers. While they see ages 25 to 45 years old to be more fit for driving that those 60 and above.
- Driving History
And in case of driving history and to how it is useful in car insurance rates computation is much simpler. For when your record has a lot of driving tickets and traffic violations, you will surely have higher premiums. So in the contrary of course, those who have maintained their records clean as possible, they will be rewarded with lower premiums.
- Type of Vehicle
And finally for the type of vehicle and to how it provides significance in calculating premiums is the simplest to understand. Remember fast and luxury cars are theft magnet and accident prone type of vehicles, as providers are concern, so they are charged with higher premiums than your typical mini van for example.
So in short, the real issue isn’t the factor itself, rather the risks that that factor pose is the key providers use. In other words, it isn’t how old you are, it’s how risky you are because of your age. If you are a teenager, you can still have lower premium. How? Enroll in a defensive driving course, or show providers your grades, they think students with high grades can be responsible enough drivers. While for driving history, just try to avoid and minimize those tickets and violations. And for type of vehicle, just avoid luxury and sports cars if you want lower premiums.