The calculation of the auto insurance premium is a complex process and each auto insurance provider has a different way of calculating the cost. There are a number of factors that the providers take into consideration before arriving at the premium that you will have to pay for your car insurance. The insurance coverage for a person for a particular car will never be the same as the insurance coverage for another person for the same car. Let us take a quick look at how two main factors, age and type of car, influence the premium for the coverage.
Age of the driver
The first factor that determines that cost of the coverage is the age of the person applying for the insurance policy. Insurance companies consider people in their middle age to be safer drivers as compared to the people in their teens. This is because older people are more responsible, considering the fact that most of them will have families and jobs to take care of. On the other hand, teenagers lead a carefree life with no regard to their life as well as the lives of others. Peer pressure is common among teens and so is driving under alcohol or substance abuse. All the coupled together are sure signs of an impending accident. Hence, the cost of insurance teen drivers is more. People over the age of 60 also have to pay a higher cost for availing insurance because they also come under the category of high risk drivers. Since most of them have failing eyesight, hearing problems and health ailments, the chances of accidents are higher.
Type of car
The make and model of the car being insured also has a main role to play in the calculation of auto insurance premiums. Newer cars that are entering the market today are technologically very advanced and can zoom at very high speeds. Hence, the chances of such cars meeting with accidents are very high. Also, these cars catch the attention of thieves easily. Therefore, the chances of them being stolen are very high. Taking these into consideration, auto insurance providers charge higher premiums for these cars. You can reduce the premiums for these cars if you get some safety equipment fitted so they don’t get stolen easily. Opting for speed control devices for these cars will also help you reduce the cost of insuring these cars.
