Determinants of Car Insurance Rates

Determinants of Car Insurance Rates

Determinants of Car Insurance Rates. Professionals working in the insurance industry know that car insurance rates differ from one car to the other. To the non-professional however, factors that determine the different rates used on a car may not be all-apparent. For example, most car owners do not know that altering their coverage from one insurer to another may mean that their insurance rates could change. Before delving into the practical details of this subject however, this article must underscore the importance of car insurance. As crises managers readily tell, taking an insurance cover is one of the surest ways that a car owner can eliminate or minimize the risk associated with motorcar ownership.

Factors that affect the car insurance rates that one pays can be summed up in ten brief points. First, the amount of deductible fees that one is ready to pay per month. Second, the safety components featured in the car (e.g. safety belts, anti-theft systems, and anti-lock brakes among others. Third, the car owner's credit rating is also a key consideration for many insurers. People who have higher credit scores are perceived as responsible and trustworthy, and are therefore more likely to be 'rewarded' with lower insurance rates.

Fourth, insurers consider the number of vehicles one has before deciding on the car insurance rates chargeable. The higher the number of vehicles one owns, the lower the rates he or she is likely to get, especially if he or she chooses to purchase their cover from the same insurer. The rates may however be affected if different drivers handle the cars. Insurers assume that a car that does not have a consistent driver is exposed to high degrees of risk.

Fifth, Car insurance rates differ according to the age of their respective owners. Car owners aged below 25 years are for example more likely to pay very high rates compared to owners who are in the 'more mature' age bracket. The assumption applied by insurers is that the younger the owner is, the more likely he or she is to engage in car-related activities like high-speed driving, or nighttime driving. As such, the insurers argue that the probability of a younger owner becoming a victim of car-theft, or getting involved in accidents is higher compared to the older owners. The sixth consideration relates to the car owner's demographic factors such as education, profession, or marital status when determining the rates. It is argued that one's demographics offer a reflection of how responsible a person is.

The final four considerations that affect car insurance rates include the mileage driven, vehicle classification, and the terms and conditions issued by the insurance company. Interestingly, one's location also affects the rates chargeable. Justifying this, insurers argue that some regions have higher car collision and theft cases than others. As such, people located in the high-risk areas no doubt have to pay higher rates than those in areas considered as relatively safe.

The auto you own and drive is one of the primary factors use by auto insurance companies to determine the rate of your vehicle insurance premium. Not all automobiles can get the same vehicle insurance rate even if the coverage is exactly the same. The auto you currently own can either increase your auto insurance premium or lower it. Automobile insurance providers will usually based their quote on the kind, type, brand and current condition of your vehicle.

Exotic or luxury cars as well as SUVs usually get the highest auto insurance quotes. Compared to other much cheaper cars, the cost to repair and maintain these kinds of vehicles can be quite expensive. The best course of action is to get quotes from as many auto insurance providers as you can in order to get the lowest rate available.

Auto insurance providers can also base the quote they give on statistics. Statistical studies have shown that there are certain types or brands of vehicles that are more vulnerable to carjacking or acts of vandalism. Vehicle insurance companies also use statistics to find out which kind of vehicles are often involved in road accidents and collisions. If you own a vehicle whose type or brands is a favorite target among car thieves and vandals then expect to receive higher than the standard vehicle insurance quote. It might be better to sell your old car and buy a much safer car. Not only will you get cheap car insurance but your mind will also be at ease while driving the vehicle and knowing that your life is not at risk.

Automobile insurance companies are more inclined to give discounts to cars that are considered safe based on statistics. A car brand or type is considered safe if only very few of such cars have been involved in accidents or stolen in contrast to the other car types. The greater the risk your car might be stolen or get involved in accidents, the higher the car insurance rate will be imposed by your auto insurance provider. If you are owned a high risk vehicle but no inclined to give it up, you need to install some security gadgets to protect your car. Car alarms, steering wheel locks, global positioning system tracer, vehicle identification number etched in the glass windows are just some of the security precautions you could take to lower the risk for your auto.

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