Know thy self – this diktat is probably truer for auto insurance rates than for any other sphere in life. In addition, you also need to know your car and the features therein to put the whole matter in perspective. There is also the question of the ownership pattern of your car and also the primary purpose of the car in the context of yourself and your loved ones. All these parameters are important in enumerating the comprehensive list of factors that affect insurance rates.
The personal factors that affect insurance rates are obvious – age, sex, driving record, medical history, multiple number of cars covered under the same policy etc. Laws and taxes pertaining to auto insurance in the state where you live are logical determinants of insurance rates. Rural areas are downward drivers of insurance premiums owing to a lower vehicular density. Frequent inclement weather in the areas where you live is a minus. Insurance is composed of two major components – liability versus personal injury protection. The liability portion of the insurance covers costs to compensate for damage caused to the other individuals and other cars involved in the accident. Personal injury plan or PIP as the name suggests compensation of costs for treating personal injury or hospitalization following an accident. The quantum of such coverage sought has a direct impact on the insurance rates. But personal injury plan premiums may be favorably impacted if the individual has other accident or hospitalization policies.
Basic family cars are lower in terms of coverage costs as compared with flashy youth models. Addition of safety features like airbags and seatbelts are positively correlated with lower premiums while anti theft devices like Global Positioning Systems (GPS), parking aids and antilock brakes are other positive factors that affect insurance rates. On your part, keep a consistently clean driving record and attend courses in defensive driving conducted by state approved schools to further bolster your attempts to achieve a lower premium figure. In case you are a beginner, premiums could be higher initially, but can be pruned with diligent and responsible driving behaviors. Convictions under driving under influence could really drive premiums upward.
The nature of ownership patterns is another variable among the factors that affect insurance rates. In case of self owned cars, purchase of extended warranties is inversely proportional to the premium charged. Multiple in-house users or situations like carpools and school pick up vans are more expensive in terms of insurance. Insurance rates are also higher in case of rented cars due to the obvious multiplicity of drivers in such cases. When we talk about leased cars, the issue is a little tricky. In addition to the basic insurance on such cars already present, you may need to buy a “gap” insurance to tide over the unfortunate eventuality of the car being totaled out. This is just an attempt to touch upon some of the factors involved and the list is by no means comprehensive – so when you shop around for auto insurance do your homework thoroughly.
