How would you feel if somebody crashes against your latest model German car? How would you go about the car’s repair expenses? Would the parts be easily available or would you have to import them? These are some examples of inevitable monetary costs. However, the amount of stress and dismay you would go through cannot be measured in terms of money.
Now consider the same situation, except that you have sufficient car insurance to protect you against the damages. What a relief would it be! Just as life insurance is important, car insurance is also extremely vital.
Amount of deductible versus the amount if premium:
Premium is the amount of money that you have to pay regularly, usually monthly in exchange for car insurance. This is the rate around which the bargaining occurs between the buyer and seller of insurance. On the other hand, deductible refers to the amount which you have to pay yourself in case of an accident. When deciding on the car insurance rate you can trade-off between deductible and insurance premium. For instance, if it is difficult for you to pay a high premium you can agree to pay a high deductible against a low premium.
Related Article: How Long Does a DUI Affect Your Auto Insurance Rates?
Seven factors that will drive up your car insurance rate:
There are many factors that contribute to the calculation of car insurance rate. Following are some of them.
Age and Gender:
This is quite an important factor when arriving at the car insurance rate. Young men are likely to be charged a higher insurance rate since they are more likely to get into accidents compared to young women. Whereas, with older people, men seem to be more stable drivers and are charged a lower premium. Elder women, on the other hand, have more chances of getting into accidents so pose a risk to the insurance company. So they are likely to be charged higher premiums.
Area of residence:
This is a major factor influencing car insurance rate. Areas which are densely populated and have a high degree of traffic congestion have greater chances of accidents. So insurance rates are likely to be high in such cities. Similarly, if you live in an area where criminal activities are widespread, chances of theft and vandalism increase. Therefore insurance rate shall be high in such risky neighborhoods. Some states do not have a law that makes car insurance mandatory. It means there are chances that you get into an accident with uninsured motorists. So this factor will also drive up your car insurance rate.
Companies also consider the driving routine you have. For instance, if you travel to work by car and have long traveling distances so it might be likely that you will be charged a higher rate. On the other hand, if you travel to work via public transport and your car is usually parked safely in the garage, the insurance rate charged shall be lower.
Occupation also determines the rate you will pay. For instance, delivery drivers who spend most of the time on roads are likely to be charged a high premium. Those who have noble professions such as policemen, nuns, and nurses are likely to be charged a lower premium.
Married people are usually safer than unmarried people because married people are likely to be charged a lower premium than unmarried people.
Companies usually check for a previous driving record to arrive at the insurance rate. If you have a clean history without any traffic violation ticket, you will be charged a lower premium.
Lastly and most importantly, it is the car itself which influences the insurance rate. A car’s safety features, its age, and size all have an impact on the insurance rate.
These were 7 factors that will drive up your car insurance rate.