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What Determines the Price of Your Car Insurance Policy?

An average person will keep his or her car for about 15 to 20 years. Within that time span there is a very high possibility of an accident occurring. This makes car insurance one of the best investments available. Despite the relatively high premium payments that have to be made, it can potentially maintain ones financial stability if an auto-related accident occurs.

The premiums are one of the biggest considerations when getting a auto insurance plan but these can be reduced if properly planned for. A premium is basically the amount that you are required to pay in order to maintain your policy. This amount scales with a lot of factors and it is important to know what these are in order to cut the cost that one has to pay.

Factors that will affect your premiums:
The factors that affect ones premiums are generally related to the risk that the insurer has to bear. Basically, the riskier the circumstances are the higher the insurance premium.  Inversely, this formula will tell us what we need to do in order to reduce the premium. For so long as an applicant and his or her car looks “safe” in the eyes of the insurer, the cost of the policy will be lower.

Listed below are the main factors that an insurance company will look at. It is best that applicants for a policy know what these are, in order to personally assess their risk factor and find ways to lower it. 

What car you drive – the price of a policy will be higher if the car being insured is an expensive one. The insurer will also look into the “risk” factor of the car. Things they will be considering are:

• Is it easy to damage?
• is it considered a sports car?
• Is it a new or old model?
• Is it prone to theft?
• What is the cost to replace the automobile?
• What is the safety rating?

What type of insurance you buy – Companies usually offer discounts for bundled insurance or for ones that cover more items. So if you’re insuring more than one car or getting other types of insurance from the same company they might have a discount on the premiums.

Deductibles – It is a staple for insurance companies to reduce or increase your premiums based on the deductible you are willing to pay. So a higher deductible means lower premiums. 

Applicant’s profile – The insurance company will also look at your age, marital status and sex. There are some statistics that show younger drivers to be more prone to accidents especially younger men. So it might seem arbitrary but they have the numbers to back it up.

If you belong to the categories they consider risky there isn’t much you can do about it.

Frequency of use – Another factor is how often you drive your car. The more you use the car the greater the chance that you will be involved in an accident.

Where you live and where you work – The location of your home and office will also affect the price of the policy. Urban areas are generally a lot more prone to damage and theft.

Driving record – Premiums will be higher for people who have already been in accidents. However there are some companies that will forgive the first accident so check with the insurer about this.

Credit history – A bad credit history will affect an insurer’s assessment of your application. This will generally increase the premiums because it creates doubt on your ability to pay them.

Other considerations – Some insurance companies will reduce the cost of the policy for government employees or for those who work for the military. Others might also look at school records for student drivers.

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Get an Auto Insurance Quote Now

Greene & Associates Insurance provides  Insurance Quotes, Rates and Policies online for Home, Auto and Business Insurance for the entire State of Florida including Lake City Fl, Jacksonville Fl, Gainesville Fl, Alachua Fl, Live Oak Fl, Ft White Fl, Branford Fl, Ocala Fl, Middleburg F, Greene Cove Springs Fl & St Augustine Fl
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