March 5, 2010

What Factors Determine A High Or Low Auto Insurance Premium

If you drive a car on public roads, you must have auto insurance. Finding good auto insurance is very important. When searching for auto insurance, you must take certain things into consideration. Most importantly you want to have the most coverage for your money. They payments you make for this insurance is called a premium. Auto insurance premiums can vary depending on a number of factors. The first factor is age. Are you a young driver who just got their license? Or are you an experienced driver who has been driving for years? A younger driver is more likely to have a higher premium, while an older and experienced driver will generally have a low auto insurance premium. This being said, older drivers have a higher chance of having negatives marks on their traffic record, which will mean a high premium. If you have a bad record with a lot of speeding tickets or a DUI, or you have had accident claims in the past, you will find that your premiums are very high. This is because you are a risk to the insurance company and it is more likely that you they will have to shell out money on your behalf at some point while you have their coverage. Another factor is location where the car is primarily driven. Auto insurance companies conduct surveys in order to see how much people in a particular area are paying for insurance. They use formulas in order to know how much to charge people in a certain part of town. They will look for trends in accidents and claims. This is why when you are researching auto insurance quotes, you are asked to input your zip code. You will be asked what the primary use for the car is and how far you travel on a daily basis. This is because the more time spent in the car, the higher the odds that you could be in an accident. Another factor involved is gender. This is because, based off the studies conducted by insurance companies, women tend to have less accidents than men. The level of education completed also effects premiums. Having a higher level of education might get you a deal on auto insurance. Another factor is the type of car you drive. Certain models are more likely to be stolen or statics show that they are used recklessly. Which, again, means that the insurance company is more likely to have to pay on a claim. In conclusion, there are quite a few factors that insurance companies have to consider when offering a high or low auto insurance premium to its clients.