Know the reasons for the variations in your auto insurance premiums


While even the most personal details are of interest to the Insurance Company, a few other peripheral details are important as well. The sum total of these details provides the Insurance Company with a picture or profile of the applicant based on which a policy is issued. The details therefore directly influence the policy offered as suitable to the applicant. Since these policies are mostly specific, it may help to take a closer look at the things a detail tells the insurance company.

A seemingly bald detail may speak volumes about the person. The most obvious question of interest to an insurance Company is the applicant’s past driving record. These may throw up parking tickets, speeding tickets and the works. Each of these helps in piecing together a profile of the applicant. And it rightly should. Even if there are very good and genuine reasons behind each of those tickets obtained, it still goes to show that the person is at best absent minded and unconcerned about trivialities such as parking signs and at worst, reckless and irresponsible. While it may seem a generalization to say that these directly influence one’s accident potential greatly, it is to a very large extent true. 

Education Qualifications 

While education may not make one a better or safer driver, it says a lot of the kind of person the applicant is. Education Qualifications and employment directly influence income, income affects lifestyle and lifestyle is a very important consideration for insurance Companies. Not only does lifestyle showcase the scale of living, it also influences the sort of money at one’s disposal. The kind of car or vehicle to be insured is one of the most important factors that influence how much you pay as premium. The costlier the vehicle, the more the insurance will cost as the cost to repair a high – end vehicle is a lot. 

Policies these days are highly specific. The reason behind making policies specific is to provide a more comprehensive kind of coverage. It should be noted that comprehensive coverage only covers a certain type of accident. If the person is involved in an accident type not covered by the policy, he or she will get not coverage for damages sustained. However, education qualification is a detail that the companies consider important to gauge for themselves the profile type of the applicant and what might serve as the best sort of coverage to provide to him/her. 

Credit details 

The relationship one has with the bank says a lot about the person. The Insurance Company may ask to see bank documents. However, most of the time, the Insurance Company will run a background check on a person’s credit history. While most of these details may provide tangential information, not directly saying anything about a person’s character or driving technique, they do count to create an overall picture of the applicant. It might make some sense to manipulate your credit rating and maintain a decent credit history profile, considering this detail is scrutinized by Insurance Companies. 

Use of the Vehicle 

This is important to note. It should be obvious that the more a vehicle is used, the higher the chances of meeting with an accident. Even though a person may lead a high flying lifestyle and need to travel distances to work and back, he or she may have limited use for the vehicle. Several companies provide transport to their officers. So a person possessing an expensive car may have one because he or she has the means to but may not get much use out of it. The insurance company may charge a lower premium in such cases and provide a policy that has limited coverage.