What Determines The Price Of An Auto Insurance Policy?

Numerous factors influence the cost of car insurance.

The factors that determine the cost of your auto insurance, such as the type of coverage you have and your driving history, are determined by a number of factors. While not all insurance carriers use the same parameters, here is a rundown of the elements that may make or break the price of your insurance: where your car is parked.

• Your driving record – Your driving record is an important factor in determining your insurance premium, so if these records are spotless, you'll pay lower premiums. If you've had an accident, you'll likely pay a higher car insurance premium.
• How much you use your car – Driving more miles increases the likelihood of an accident, so driving your car for work makes you pay more if you drive for work-related purposes or use it as a means for long commutes. If you drive only occasionally, few companies call "pleasure use."
• Location, location, location – Urban drivers pay higher insurance premiums than rural or small town ones. Where you park your car (at the street or in a secure garage) and anti-theft devices may influence the pricing as well.

These factors affecting premium price can vary from one state or area to another include cost and frequency of litigation; medical costs and auto repair costs; prevalence of auto insurance scams; and local weather conditions.

• Your age – Older drivers are much less likely to have an accident than younger ones. Statistically, insurers tend to charge more for young drivers under the age of 25 than older drivers when renting a car.
• Your gender – Statistically, women are at greater risk of getting into an accident, having a driver under the influence, and experiencing a serious accident than their male counterparts. Not all other things being equal, women often get a cheaper auto insurance rate.
• The car you drive – The expense of your automobile is a significant factor in monthly insurance costs. Other variables include the possibilities of theft, the expense of repairs, your automobile's engine size, and the overall safety record of your automobile. If you're on the lookout for a particular kind of car with great safety scores, you may qualify for a premium discount.

How well a car protects occupants and how much potential damage to other cars it may be capable of inflicting are the two major factors insurers take into account when determining the price of insurance. There is an increased cost associated with particular models when involved in an accident.

• Your credit – Similar to the credit score, your credit-based insurance score is a statistical tool that estimates the likelihood of your filing an insurance claim and the likely amount of that claim.
• The type and amount of auto insurance coverage – The limitations of your basic auto insurance, deductibles, and the types of insurance policy options (such as collision) you can have can all affect your auto insurance rates.
• NEVER race or religion – Insurance rates cannot be based on race or religion.