There are various types of coverage provided by auto insurance companies. Coverage is provided for accidental damage repairs. Coverage is also provided for medical expenses in case of accidents. Auto insurance companies also provide coverage for theft. However, the insurance premium is not the same for everyone. The rates vary from person to person based on various factors.
Age of the Car owner
Interestingly, the insurance premium depends on the car owner. Housewives and seniors are less likely to drive the car a lot. Hence the chances of accidents and thefts being much less, the insurance premium too would be less. The premium is found to be the highest for middle aged working men who seem to use the car the most and hence are the riskiest age group for insurance providers.
Credentials of the insurance policy holder
The credentials of the insurance policy holder also influence the insurance rates. Students with very good grades are often considered more trustworthy and hence get lesser rates for insurance coverage. Similarly, if one’s record is clean without any accidents or traffic violations for an extended period of time, then insurance coverage would cost much lesser.
Extent of Vehicle Usage
If you rarely use the vehicle, and use public transportation for commuting, it is less risky for the insurance provider. Hence the lesser the annual mileage of the car, lesser will be the premium for insurance coverage. The same is the reason why housewives and old people driving cars get insurance for less premium. They are less likely to use the car a lot, thus facing less risk of accidents.
Condition of the vehicle
If the vehicle is old and rugged, the insurance is going to cost less than what it would cost for an expensive sports car. If an expensive sports car meets with an accident, the damage repairs are likely to be much higher than is the case for a normal sedan or old car. With time, the chances of the insurance policy holder getting used to a particular car also increases. Hence the accident ratio comes down.
Mechanisms installed in the vehicle
The safer the car, cheaper is the insurance. This is one of the biggest factors that influence the rate of insurance coverage. If a car has anti lock, anti theft mechanisms like alarms and navigation control systems, it is likely to be safer from accidents and thefts than a car which doesn’t possess all these mechanisms. Hence, the insurance providers can expect fewer chances of claims made by the policy holder who is owner of such a car.
Negotiation of Terms
One reason why some policy holders get the same coverage for lesser premium is because they can negotiate better. With so many options available on the internet, customers can calculate using online calculators, what an insurance coverage will cost them with each of the providers. Obviously, the lowest premium for the same coverage is the best option. The customer can actually negotiate with the insurance provider using few or all of the above factors to get the insurance for a lesser premium. At the end of the day, if a policy holder turns out to be a safer bet which only he can reveal through traffic records, average mileage in a month or credit rating, the insurance will cost less.