The cost of your car insurance is generally affected by three major factors, as the driver, the vehicle, and the insurance company.
Insurance companies collect personal information of every driver using the driver license number, address, birth date and social security number before they calculate the insurance cost.
- Age of driver: Age of the driver affects the insurance cost. Every insurance company has a discounted rate for every age.
- Address: If the area you live in has high claims ratio, then it also affects the rates of insurance. The rate can be higher in insurance fraud areas and rural areas with high deer accident volume.
- Driving record: If the driver has a clean driving record with no traffic violations and rare accidents, then he will have to pay lower car insurance.
- Health insurance: If the driver already has health insurance coverage, then he will not have to buy much medical coverage on the car insurance.
- Property: People who have their own homes get homeowners discount and multi-policy discount from insurance companies. People who own a property are considered more stable which ensures lower risk.
- Educational Qualification: Drivers that have higher qualifications and have been good students are rewarded with lowers rates and discounts at the time of insurance because these people are considered more responsible.
Information About Your Vehicle
Car insurance companies decide on the insurance cost after they gather information about the vehicle. This information can be provided by the car owner, or it can be collected from the VIN number.
- Manufacturer: Different car manufacturing companies hold different value in the market. It is important to know if it’s a native company or a foreign one. Insurance for foreign companies cost much as the car parts are difficult to get.
- Manufacturing year: The manufacturing year of the vehicle also affects the insurance rate, as newer vehicles are qualified to get a new car discount under certain conditions.
- Car model: It is an obvious fact. The more expensive and fancier model you own, the more the insurance cost will be to cover it.
- Safety features: Safety features like airbags can protect the driver and passengers well, so they are preferred by the insurance companies. Old vehicles that have no airbags have high insurance rates.
- The number of coverages and vehicles: Obviously, the more coverages you want, the more expensive your insurance cost will be. On the other hand, you will get a multi-car discount if you insure more than one vehicle.
Insurance Company Details
How the business is operated by an insurance company also affects the insurance cost given by them.
- Payment plans: Payment plans affect the overall cost, so, check your payment plan at the time of a new purchase of insurance. By changing the plan, you can save more.
- Company profit: Every company has its own vision towards profit, and it is reflected in the insurance rates given by them. Various factors like investments, weather and underwriting can affect the company profit.
- Insured time length: Many car insurance companies often offer lower rates to older clients that have been with the company for many years. Even if the discount is very low, it still helps a lot in the long run.
Apart from these, state laws also affect the cost of car insurance. Everyone must obey the state laws, so the insurance companies cannot go any lesser than the state’s minimal insurance rates. Moreover, if the state has additional fees, the driver and the insurance company both must go with it.