February 7, 2011

Knowing Why An Auto Insurance Quote Is High Or Low

If your auto insurance quote doesn't appear to be where you feel it should be at, many things could be affecting the price. The price of auto insurance is determined by many factors and they are nearly all associated with risk. When an insurance company offers you an auto insurance quote, they have to take into account the probability that they will have to pay out on your behalf, along with covering their overhead costs. Overhead costs can be trimmed down by using an online car insurance company, but the other costs depend on the drivers themselves. When purchasing auto insurance, keep in mind the things that will affect your prices. You could get a low auto insurance rate if you drive an older car, or one that is on the cheaper side rather than a very expensive car.

One thing that affects your rates is what type of vehicle you are driving. In general, a cheaper car will have a low auto insurance rate, while an expensive one will cost more. You could also have low auto insurance rates if you live in a rural area as opposed to urban areas. There is more vandalism and theft statistically in urban areas, so that would cause your premium to increase.

Insurance companies take a few more things into account when determining your monthly premium payment. These typically include credit history, marital status, sex, age, driving record and how much a person drives usually. Credit history is a more modern addition to the list of variables taken into account. It has very little to do with payout probability, but a slight correlation has been seen with poor credit and auto insurance payouts. Marital status is an important factor as singles typically have more accidents than married men and women. When it comes to a person's sex though, men are shown to have more accidents than women, so usually have a higher payment.

The last few things to affect a person's auto insurance quote are age, driving record, and the amount they drive. Age is a crucial consideration in insurance quotes. People over 25 usually have a low auto insurance price when compared to their young driver counterparts. People under 25 statistically have more accidents and are at fault more than people over 25. Finally, the amount a person drives is taken into account. That is important because the more time spent on the road, the more likely an accident. Driving record is perhaps the most important of all of these. Tickets and accidents increase a person's rates, while good driving will reduce those rates. Do what you can to save on your insurance.