Car insurance is mandatory in every state, but each state regulates what coverage is necessary and which ones are optional. Auto insurance premiums are calculated using a variety of combined factors. Therefore, you may be paying more or less than your brother, parent, spouse, or neighbor down the street. All types of insurance policies are based on risk, meaning that if you pose a higher risk of filing an insurance claim or getting into a motor vehicle accident, then you will be charged higher premiums.
Auto insurance premiums are established through several aspects. First of all, the driver’s record and insurance history are taken into consideration. First time drivers are considered a higher risk because they do not possess adequate driving experience. They are more likely to be involved in an at-fault accident than someone who has been driving for over 20 years. As well, if a person has numerous driving infractions on their record, they are deemed to be high risk and will probably cause more accidents in the future. Having long lapses in insurance coverage can place you in a higher risk category as well. This may show the insurance company that you have been driving without insurance coverage.
You may have to purchase high risk auto insurance if you live in certain cities or areas. Some places have higher crime rates or higher accident rates and so drivers will be charged higher premiums to offset possible theft or vandalism claims. This is a hard factor to change as not everyone can just pack up and move to another area in order to lower their insurance premiums.
The type of vehicle also determines insurance rates. When you call for auto insurance quotes, you will be asked about the make and model of the vehicle you drive. Some vehicles are more expensive to insure because they may cost more to repair, they may be stolen or vandalized more, or they may be involved in more accidents than other types of vehicles. If you normally have to drive long distances to and from work, you are on the road more and thus there is a higher chance of you being involved in an accident.
Sometimes it can be difficult to escape from expensive insurance premiums, but when you obtain auto insurance quotes, your insurance agent can advise you if you qualify for cheap premiums or if you will have to purchase a high risk auto insurance policy. They will also counsel you in different ways you can help to lower your premiums. Automobile insurance is necessary but it doesn’t have to bankrupt you. By being a safe and conscientious driver, you can take the first step towards obtaining lower car insurance rates.