3 Factors That Affect Auto Insurance Costs
Everyone pays a specific amount for their car insurance. Your neighbor pays a different price than what you see on your bill each month. Some are lower, and some are higher. Most insurance companies consider a few key factors to help calculate how much you pay for auto insurance. It’s crucial that you understand these factors yourself.
Policy and Deductibles
When you select your auto insurance deductible and plan, you typically decide to purchase coverage that may not be required by state law. The specifics of your policy and deductibles play a significant role in your monthly costs.
Typically, choosing a higher deductible equates to a lower monthly payment; selecting a lower deductible means a higher amount. Additional coverage provides added protection, depending on claim type, but also adds to the monthly cost.
Many car insurance providers develop vehicle safety ratings of their own after collecting data from customer claims and industry safety reports. The vehicle you drive is just as important as how long you’ve held a driver’s license.
Most companies offer discounts for safe vehicles, while they charge more for flashy cars. Some insurers will increase premiums for cars that are susceptible to damage, occupant injury, or theft.
Your Driving Record
If you crash, you typically pay more for your insurance than someone who has been crash-free for a few years. If you are the type of driver who has avoided a vehicular accident for quite some time, then do not get complacent. It is best to remain vigilant and maintain proper driving habits.
You cannot rewrite your driving history, though. Having an accident on your record is often a good reminder of why it is crucial to drive safely. As time goes on, past crashes will affect your premium far less.