What are the factors that decide auto insurance quotes?


Purchasing auto insurance is always a confusing and time consuming task for auto owners. Because auto insurance is mandatory in the USA, there are many insurance companies offering different quotes and customized insurance policies according to the needs of every individual. The challenge here is to choose the best insurance company and the select an insurance policy that does not cause the monthly premiums to go sky high. 

Here are a few factors that directly affect the insurance quotes that the companies offer, and help in deciding the insurance policy that auto owners need: 

Factors associated with the automobile:

Insurance companies quote different insurance rates for every different model of the car. Insurance premiums are higher if:

  • The car does not have any safety equipment installed.
  • The car is classified as a sports car.
  • Statistics associated with that particular model shows a high number of road accidents.

The premium rates also depend on a number of other factors like the year of the make, number of miles the automobile has run, the number of years the car is used and so on. 

Factors associated with the driving record:

Insurance premiums depend a lot on the driver of the automobile as well. Insurance premiums can be affected by the following:

  • The number of traffic violations recorded on the driving license of the auto owner directly affects the monthly premiums charged. Even a single traffic violation like a speeding ticket can increase the premiums greatly. Insurance premiums are lower if the auto owner maintains a clean driving record. There are special discounts if the auto owner does not commit a single offence for a specified time period.
  • Any previous accident reported has an adverse effect on the monthly premium rates, even if the other party involved in the accident is at fault.
  • Defensive driving lessons or any other corrective driving classes taken can effective reduce the monthly premium rates.  

Factors associated with geographical location:

Geographical location plays an important role in deciding the monthly premium rates offered by every insurance company.

  • If the area of residence is prone to natural disasters like earthquakes or hurricanes, insurance rates will be higher.
  • Even areas prone to adverse weather like heavy rainfall or heavy snow can be the reason for higher monthly premium.
  • If the commuting route involves high traffic areas or highways, then the insurance company charges a higher premium rate.