Sometimes you are wondering why you are paying much for your car insurance premium. It even occurs to your mind that your insurer may be overcharging you. But have you ever thought that providing insurance is a risky business?
The premium that you pay is actually corresponds to your risk in the point of view of the insurer. This means that the higher your danger for an accident, the higher your insurance premium would be,
What are the risks that are taken into consideration? It would be simplified into two categories only. You as the driver and the car that you drive,
As a driver, the insurance company will determine how risky you are based on many factors. Age is on the top of the list. Insurers consider young drivers to be more aggressive. The safest age bracket would be from twenty-five to forty years old drivers. Logically speaking, when drivers just got their first car, they will be more thrilled in driving it. The car insurance company will be risking their money and for that, the premium you have to shell out will be determined.
The kind of career you have or simply your lifestyle is also a big factor. This will include how you use your car and the nature of your work. How far you travel in a day greatly influence your premium.
You might be wondering why you as executive, who attend to a lot of meetings, pay a higher premium than an artist who is just staying at home doing his job. Well, the insurance company finds the nature of your job a greater threat for car accident in that case. So, needless to say, the more you are in front of the steering wheel, the higher your premium will be.
Your location also plays a very significant role in determining the auto insurance premium assigned to you. Those who are living in the busy areas will have higher premiums than those living in a more set-back community. It is simplified as; the more the car in the road where you reside means the higher the possibility of car collision and the higher premiums as well.
After considering the lifestyle that you have, insurance companies will also base your premium on your car. The “fast cars” or luxury cars are paying higher amount of car insurance compared to the low profile cars. This is because of the reality that these cars are more prone to accident since they are faster and they tend to attract car thieves because of its classification. The insurance company fears that the faster the car, the more it is prone to car accident. Heavy cars are harder to maneuver so it would pay lesser premium.
The higher your risk considering the abovementioned instances, the higher your insurance premium will be. It is best to look for discounts because it is not expected that you will change your standard of living for the sake of your insurance premium. Your lifestyle might be causing you a higher amount paid for auto insurance, but you might as well be qualified for better discounts. Just look at the brighter side of the situation and use it on your advantage when it comes to car insurance is concern.