Factors Affecting the Cost of Auto Insurance


Auto insurance is all about determining your risk level and from then on, premium rates are derived. In order to get the best policy, it’s important to know what these factors are and how they will affect your risk status. Insurance companies use complicated mathematical calculations and statistical information to come up with the quotes. While the algorithm remains hidden, we have come to know few general factors that all drivers looking for affordable rates should know.

One of the factors used is the driver’s record. This holds everything from simple fender-benders, over speeding tickets to disastrous fatal crashes. It is also believed that this factor has a significant effect above anything else. This has been proven many times and even insurers encouraged drivers not to smear their records if they want cheaper premiums.

Without a doubt, insurance claims and traffic citations could raise the insurance premiums in no time. This is in response to level up the potential loss against the insurer’s income. Basically, any forms of traffic violations or claims reported would signal the insurer’s red flag to restructure their premium prices for you. A typical over speeding charge merits 20% increase of your insurance quotes. Participation in multiple road accidents will cost even more. This is the reason why you have to take all the necessary precautions not to make any smears or smudges in your driving history, unless you’re not interested with cheaper insurance premiums.

Another factor that’s commonly used during a deliberation is the type, model and make of the vehicle you are insuring. In general, fast, expensive and unsafe cars are hammered with skyrocketing insurance premiums. For the same reason that if you want to avoid costly auto insurance, avoid purchasing a sports car or luxurious vehicles to name a few.

Safe vehicles usually end up paying lesser cost. The ones with additional safety features or gadgets installed. For example, aside from the standard airbags, installing additional airbags could lower the fees. Electronic anti-theft gadgets or alarm systems could also bring the cost considerably. Cars that have become the theft’s favorite targets will usually end up expensive premiums. You may want to review these numbers if you are looking for ways to cut the cost of your monthly or yearly insurance expenditures.

Aside from those prominent factors discussed above, other variables manage to contribute to the outcome of your insurance quotes. Some of these variables are uncontrollable by nature such as your age and driving experience. Young student drivers will have to deal with high insurance quotes until reaching the age of 25. Theft and accident statistics in your place of residence are also being considered. If you live in a place where a high incidence of stolen vehicles is recorded, the only way to do away with it is to leave the place altogether, which is in most cases, totally unacceptable.

Although  some of these variables are out of your control, there are many things that you can do to mitigate the rising costs. One way is to contact your insurance agent and then ask for advice how to lower down your bills. Review your insurance coverage and considering dropping unnecessary coverage to lighten up the load. Alternatively, ask for discounts that your account could qualify.