Contrary to popular belief, auto insurance rates are never the same for everyone. In fact, car insurance companies depend on different factors to come up with the rates. Experts say that premiums differ from one car owner to the other because of the different circumstances governing them.
Industry specialists are cautioning against the use of the term “car insurance rates” since it can be misleading. They argue that it does not actually exist because providers rely on various aspects to come up with premiums. No two rates are ever the same because of the subtle differences between car owners.
For example, the location of the motorists plays a crucial role. Some areas and states are considered as riskier than other locations. Natural disasters, severe weather systems, and even high incidence of automobile crimes can spell higher insurance for car owners.
A motorist’s driving record is also an important basis for insurance rates. Numerous citations and traffic violations indicate that a particular car owner is more at risk of getting in an accident. Having spotty driving records can automatically mean more expensive premiums for years ahead.
Of course, the type of car being driven plays an important role in determining insurance rates. Simple cars tend to have lower premiums while larger vehicles like SUVs are considerably more costly to insure. High-performance sports cars are also on top of the list when it comes to the most expensive vehicles to insure.
Some states also allow insurance providers to look into the credit ratings and histories of potential clients. This gives them the opportunity to determine whether a particular policyholder will have difficulty paying on time. However, some states prohibit this, claiming that a car owner’s financial ability does not have bearing on whether he or she should receive insurance.
Industry experts recommend stocking up on information about the various factors affecting insurance premiums to be better prepared when purchasing insurance coverage. Car owners also have to be aware that there is no single standard car insurance rate. Some insurance agents and brokers often use this term to sweet-talk potential customers.
Motorists can also stand a better chance of getting more affordable insurance by comparing quotes and shopping around. Some insurance providers would offer substantial discounts for new policyholders. Analysts say that this is a result of a brewing price war between competing insurance companies. In fact, car insurance rates averaged lower this year compared to last year.