One insurance policy could work flawlessly for you but possibly not for the other drivers. This is because each driver has his/her own set of requirements when it comes to auto insurance. There are also other variables that need to be considered, as this will greatly affect the outcome when the policies are finalized.
Factors affecting auto insurance rates.
Not a single insurance provider relies on one factor alone when computing insurance rates. As a policyholder, some of these factors are controllable such as choosing an inexpensive car instead of a sports car or increasing the deductible to lower down the annual or monthly insurance premiums.
If you bought a car, and you still owe some money on it, you may be required to purchase a gap insurance, which is basically used to protect the difference between the car’s value and your debt. Just be careful when purchasing this policy from your car dealer because they tend to overprice this coverage. It is better to talk to your insurance provider or agent first and compare the price to see who is offering the best rates.
Factors such as state insurance laws will have a significant impact on insurance rates as well – and they are completely out of your control. Different states impose different levels of coverage such as the minimum liability coverage.
Naturally, if you drive often you can only expect high insurance rates. You may or may not be able to control this factor but if regular commuting is part of your job, then you cannot do anything about it – unless you take a public transportation. If you live in Texas, you can try to ask a policy that takes effect only when you are driving. In a nutshell, the drivers are only charged per actual miles of driving. Although this idea sounds like a big help for policyholders who want to save money, but it has not taken off outside Texas yet as of this writing.
Understanding Actuarial Tables?
Many insurance providers use the actuarial tables to determine the levels of risk of the driver. When you think about it, the auto insurance industry is likened to a betting game. You pay for your auto insurance because of the likelihood that you would encounter an accident in the future and your insurer is hoping that it will not happen at all. It seems that the auto insurance industry is winning at this point because they are able to stay in the business for a long time. Spreading the risk to a large number of people, which many of them will never file a claim or encounter an accident, is the key factor of the auto insurance industry to succeed.
Actuarial tables contain algebraic equations, which has the potential to determine if an individual is more likely to file a claim or not.
Getting the insurance that you need.
This is probably the first question you should ask, and if you are in doubt, you can always ask assistance from your insurance agent. Most states require at least minimum liability coverage and it is likely that you already have this coverage. This will cover the expenses from injuries to property damages to the third party if you are the driver at-fault. Interestingly, you are not included in the said coverage or if your car has been stolen or vandalized. If you own a new car, a full coverage insurance might be necessary.
