There are a number of factors that can actually determine your auto insurance rates. According to a research, men pay an average $15,000 more for auto insurance in their lifetime compared to the American women. It might be tempting for you to reduce the amounts of coverage for lowering your car insurance premium. But, it is also essential for you to build a clear conception about the other price determining factors of Auto Insurance.
So, here is a list of the factors which has the capacity of affecting the price of your auto insurance policy.
Marital Status:
It has been noted that married people are less prone to meet with an accident, compared to the single people. Thus, getting married can significantly help you to cut down the rate of your auto insurance. Although, the decreasing rate of the policy highly depends upon your driving history. If you belong to that group of people who has never met with an accident before, you would be able to witness the rates going down to a great extent.
How much you Use the Car?
This is also one of the most essential factors which can determine the price of the policy. The more miles you drive, the chances of meeting with an accident also increases. If you are using the car for work or driving it to a long distance regularly for reaching your work place, you will pay more. On the other hand, if you are driving your car occasionally- what some companies have tagged as ‘pleasure use’, you will definitely pay less.
The Car you Drive:
Some cars can be more expensive to repair or more likely to be stolen than the other cars. Larger cars are generally considered safer than the smaller ones. Therefore, a lot of people are picking larger cars to have a safe drive. However, cars with larger engines relative to body size tend to have higher rates. The cost of your car itself can be the major rate factor. The cost of repairs, size of the engine also has the capacity of providing an impact over the insurance premiums.
While fixing the rate of your auto insurance policy, the insurer will not only look at the safety of the occupants, but they will also look at the potential damage a car can do for the other. If a car has the capability of inflicting a huge amount of damage to another car, then the insurer might charge you with an extra amount of money.
Where you Live?
In most cases, it has been noted that a lot of accidents occur closer to the homes. Thus, the location of your house can affect the amount of your auto insurance directly. If you are living in a populated neighborhood with a lot of cars around you, then you are at a higher risk of meeting with accidents or collisions.
Repairing your cars in some places can actually be quite costly. There are many urban areas where the ratio of uninsured cars are very high due to the problem of unemployment. Some expensive cities of America like Philadelphia has a higher range of auto insurance, because of the high traffic density. If you are living in a place, where the chances of theft is greater than the price of your auto insurance policy will automatically hike.
The Gender:
According to a study, women are prone to pay more for their life insurance policies compared to the other policies. While on the other hand, men pay a higher amount of auto insurance premiums. According to the statistics, women belong to that group where there is the chance of getting into an accident is very low. A study has revealed the fact that, auto insurance rates can be 68% lower for a married woman with a college degree and a job. This ratio can be altered in the case of a single woman with a high school degree.
As more male teenagers have accidents than female teenagers, young men have to pay higher rates for their auto insurance policies. Thus, it is one of the most common factors used by the insurance companies in determining the rates of your car related policy.
Driving History:
If you have been in accident previously, the insurance company will definitely charge an extra amount from you. If your driving record is bad enough, some insurance company might also refuse to provide you with an insurance at all. Generally this defect tends to fade away over the time. So, try to drive more slowly and carefully for avoiding all hazards.
Paying for the car insurance is one of the most crucial parts of owning a car. So, you need to be more cautious about doing all the needful things for lowering the rate of your auto insurance. You can also think about taking the help of a local agent to understand which deductibles, coverage or limits would be appropriate for you.
James Paul is the editor and personal finance blogger at Basic Finance Care where he writes about personal finance and money management tips. He is also a regular contributor to many other personal finance blogs.
