How Car Insurance Companies Determine Rates
If you're like most people, you're probably wondering how car insurance companies determine rates. You're probably also wondering why someone who drives the same vehicle as you is paying much less for better coverage. These and many more questions are all valid. But, there are many factors that will increase or decrease premiums.
One of the first things that is considered when it comes to car insurance is the vehicle being driven. If it is an imported sports car, then you should be prepared to pay a lot more. On the other hand, a low end or average priced domestic sedan will cost you much less. Additionally, the year of the vehicle will also determine this increase or decrease, as will be statistics regarding theft of the particular model.
The next thing that is considered is the client or the potential client. Here, different things will play a role. For example, the age and experience of the driver. The driving history will also have a huge impact on how high or low your rates will be. For instance, a driver who has never had a claim or any moving violations on his or her record and has been driving for over 20 years will have much lower rates than someone with who has two insurance claims and three tickets.
Continuing with the potential client, the gender is also another consideration, as is the profession of the individual. The marital status and the city in which you live are also other criteria that are looked at. And, in case you didn't know it, your credit history will have a direct impact on the premiums that you will be subjected to pay. This is regardless of whether you are paying the entire amount upfront or making monthly payments. Those who have better credit will get better deals.
The rates that have been determined for you are also based on the other drivers in your home that will be driving the vehicle. So, if you have inexperienced or teenage drivers on your policy, it will definitely shoot up the costs, just as other high-risk drivers will do.
Of course, there is also the coverage that you are asking for that will impact the amount of your premiums. The more coverage you get, the higher the cost will be. So, it's always good to know where you stand and what is being scrutinized before you start shopping around for your coverage.
EmoticonEmoticon