June 27, 2010

Reasons The Cost Of Car Insurance Quotes May Fluctuate

When a person obtains an auto insurance quote, they may be confused as to why there is such a difference in what they are charged compared to the premiums paid by a family member, friend, or neighbor. The price fluctuation of car insurance rates is a result of a combination of factors.

First of all, car insurance is largely calculated based on the individual driver. Insurance companies are concerned with risk; the risk that a driver may cause the insurance company to dish out a large monetary payout. If an individual has a poor diving record with several traffic tickets or at-fault accidents, then they are more likely to file a claim on their auto insurance policy. Because of this, insurance companies will impose higher premiums on such an individual than on one who has a clean driving record. Even if your record is spotless, if you are involved in an at-fault accident, your insurance premiums may be assessed a price fluctuation at your renewal date. A person's credit score also plays a part in auto insurance premiums. According to insurance companies, a person with a poor credit score is more likely to file an insurance claim.

If you have recently moved from a small town to a large city, the premium you receive when you obtain an auto insurance quote will probably be higher than your previous insurance policy. This is because larger cities are subject to higher crime rates. There will be more car thefts and instances of vandalism in a bigger city. This means that the insurance companies will have to pay out a larger number of car insurance claims. Because of this, they raise the premiums to offset possible claims. The same applies with motor vehicle accidents. There is more traffic in a larger city which contributes to a higher possibility of being involved in an accident.

Each insurance company determines the rates that they charge their clients. A larger insurance company that has a substantial amount of policies in their books is able to negotiate better rates than a smaller insurance company with few clients. Many insurance companies will extend discounts to their clients, while others will not. These discounts can save an individual a substantial amount of money over the term of the policy.

The bottom line is, when searching for the most affordable car insurance policy with the best coverage, you need to shop around. Compare several quotes from several different insurance companies. Keep in mind that price is not the only issue you should consider. Research the insurance company to make sure that they are financially stable and provide you with exceptional customer service as well as round-the-clock claims service.