Car insurance premium has a usual spot on the list of things we worry about. We tend to doubt why we are paying such high prices while we learn about people paying a lot less than we do. It will be good if we have knowledge on how our insurance providers compute for the premium rates we pay for. Discussed below are some factors that have a bearing on our premiums.
The first factor insurers consider is age. In this case, the first time drivers, oftentimes teenagers, are charged at a higher rate because the companies see teenagers as riskier on the road and are more involved in vehicular accidents according to statistics. With these concrete data present, insurance providers think that teenagers would need more money from insurers more in accidents. This causes them to raise the premium they charge so the company will not be bankrupt.
The next factor is all about your car. The type, model, and manufacturer matter in computing insurance premiums. Basically, luxury cars are charged with higher premium. This is because that when the luxury car becomes involved in an accident, the company will have to spend more money than usual. This is because in most cases, luxury cars cost more in replacing parts of it. Additionally, luxury cars are very hot in the eyes of robbers and thieves. This makes luxury cars riskier than older cars.
Your mileage also counts in the premium you pay. This is the average distance that you travel in one year. When you have lower mileage, you have lower premium rates as well. This goes the same vice versa. The justification of this matter is because of the risk factor when you are on the road. Basically, the insurers think that the more time you spend on the road, the higher the probability that you may be involved in a vehicular accident. Lowering this is simple. Reduce the time you use your car by using public transportation and such.
Your sex also affects the premium charged on you. If you are a man, expect a higher premium rate than women. This is because that studies show that women are better at defensive driving than men. Women are proved to be safer in driving on the road than men. This becomes a basis for insurance providers.
These are only a few of the many factors that insurance providers consider in computing for the premium they charge on their customers. But with the current competition in today’s insurance market, we can only find the perfect insurance we are looking for by comparing quotes for it. We can even get the chance for discounts that way.