Many people wonder why they kept getting skyrocketing insurance premiums while others are happily enjoying excessively low insurance rates. Well, there is no magic behind this thing.
In this article, I’m going to share with you five of the most common factors that may affect the rate of your insurance premium. After reading, you should be able to determine why you’re paying this low or that much.
Each person is unique and his insurance policy as well. Several factors will affect the rates during computation. Two persons having identical cars and planning to buy the same coverage may not end up with the same rates. The reason – the car is not the only factor that insurers look into when computing for the rates.
It also helps if you acquire multiple quotes from different companies. This seems to be the norm these days, but I’ve known many people who do not shop around and just buy right away with the first insurer they come across. If money isn’t an issue here, you can go ahead and do that, but if you want to stretch your cash to the very end, pay attention to the following pointers discussed below.
Driving Record – We’ve been telling you this since the dawn of auto insurance era, that having a clean driving record could lower reduce the premiums significantly. Insurance is a game of risk and if you’re being identified as a high-risk individual, then expect skyrocketing fees. Steer clear from tickets, accidents and insurance claims before it’s too late.
Age – If you’re a 16-year old driver, you’re risky. That’s a fact as far as insurance providers are concerned. Although there some ways a teen driver can do to slightly reduce his premium, it remains relatively high. However, upon reaching the age of 25, most drivers will start to notice a steady decline in their insurance premiums.
The Vehicle – The type of car you’re driving affects the premium computation as well. In fact, choosing the wrong car can leave a big dent on your monthly budget. Most insurance companies hold statistics on the type of cars usually involved in car accidents.
For example, if you own an expensive sports car and you collided with another car, this could mean a hefty withdrawal from your insurer’s profit. In addition, expensive cars are the prime targets for theft, vandalism and numerous other crimes. Getting a comprehensive coverage with these cars will surely become a big-ticket item.
Residence – If you’re living in a crowded place with no ample and secure parking space, then don’t expect to get your premiums cheaply. Likewise, if you need to travel regularly in a congested location between home and work, you’ll likely to share the same fate.
Gender – Men in general get high insurance rates based on statistics (again). This is due to the number of recorded incidents involving men and their reckless driving behaviors. Although some women also drive in the influence of drugs or alcohol, but as always, the majority wins the game and in this arena, it’s the male group.
