Factors That Impact Auto Insurance Premiums
Many people confront rising auto insurance premiums each year without knowing how to stop the increases. There are a number of factors that can adversely impact the premiums that are paid for auto insurance. Knowing these factors and managing them can make a big difference when it comes time for your policy renewal.
The make and form of your car has a big impact on your premiums. In many situations, more expensive cars are more expensive to insure. This is because substitute parts and labor are more expensive. Safer cars, already if they are larger, can reduce premiums, because drivers and passengers have a lower likelihood of dying or becoming seriously injured in these cars.
Personal driving history has a emotional effect on ones premiums. Accidents can and often do increase your premiums, and too many accidents can consequence in non-renewal of a policy. Traffic tickets not only cost you money when incurred, but they are tracked by the insurance companies. Drivers that get tickets are considered to be a higher risk and cost more to insure.
In most situations, cars become cheaper to insure as they get older. At a certain point, the substitute value of an older car is low enough that collision coverage is not needed, as the premiums would be more than the cost of buying an identical car of the same age.
The number of miles pushed over a year is a question that insurers ask about. This is because a car that sits in the driveway has a much lower risk of getting into an accident than a car that is in traffic. People who work at home and only excursion for leisure will save a lot more than people who commute twenty or thirty miles or more each day.
Similarly, a car owner who lives in a rural area will have lower premiums than one who lives in a high traffic urban area. This is due not only to increased risk of accidents in urban areas, but also because of higher auto theft rates in urban areas. Some people in urban areas incur a very high cost of transportation, including parking garage fees, and some of them decide to rely thoroughly on public transportation.
A driver’s age is another factor in setting rates. Younger drivers are more expensive to insure, as they tend to be in more accidents than older drivers. Older drivers are safer and more experienced drivers in most situations. These higher rates can be offset slightly by having all drivers in a household on the same insurance policy, consequently incurring a multiple driver discount.
Every driver needs insurance, but hopes to never need to use the insurance coverage. Taking the time to understand the factors that excursion increases in auto insurance premiums can help the consumer to save a great deal of money on insurance.