Key factors that impact auto insurance premiums


A lot of auto insurance companies use their own logic to provide a quote for the coverage you are looking for. However, there are a set of factors which are considered by most auto insurance companies. It is advisable to understand these factors so that you can look for better discounts. Auto insurance rates firstly depend on your profile. For example, a middle aged professional who commutes daily to work will have to pay greater rates, compared to a senior citizen or a housewife. Another related factor is your average mileage across a year. If you travel a lot, then the chances of your being in an auto accident are higher, which is why your auto insurance rates too go up.

Auto insurance rates depend on the city or the region in which you commute often. For example, if you drive 25 miles a day in a city which has a very high accident rate, then your auto insurance rates could be much higher compared to a place which has less traffic and a lower accident rate. In fact, this is also the reason why your auto insurance rates go up in places which are faced with issues like hurricanes, frequent bad weather, curving, accident prone or bad quality roads and landslides.

Auto insurance rates also depend on the kind of vehicle that you drive. If you are driving a mid-sized sedan, the auto insurance rate would be less than in the case where you drive an expensive SUV. This is because expensive cars could cost more to repair. Similarly, SUVs are more accident prone than medium sized sedans, causing the auto insurance company to charge bigger premiums. Anti theft mechanisms, navigation assists, air bags and other safety features in your vehicle could lower your premium as they can mitigate or eliminate the danger totally.

Auto insurance rates vary from one company to another and you could land a plush deal by requesting for quotes online from several different auto insurance companies. If you are someone who has an impeccable driving record then you can expect better discounts. On the other hand, someone who has violated traffic laws quite often, like jumping signals, driving under influence or speeding, will have to pay much bigger premiums. Therefore, if you have a clean driving record extending over more than couple of years, then you can negotiate for better rates with the auto insurance company.

Auto insurance rates also depend on your credit history and your academic record, two factors which are not usually closely associated with auto insurance. If you have a credit score that is impressive, auto insurance companies are satisfied that you are more responsible and therefore less prone to accidents. Besides, you are more likely to pay your premiums on time, which is what the auto insurance companies prefer. Similarly, students who have a good academic record tend to be less reckless and involved in accidents. Lastly, customers making fewer claims in the past will be able to enjoy lower auto insurance premiums.