What Goes Into Determining My Auto Premium
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
What Influences My Auto Insurance Premium?
When insurance companies provide an auto insurance quote, they consider various factors. Here’s a breakdown of what goes into determining your auto premium:
Age
Insurance companies generally prefer older, more experienced drivers. According to the CDC, drivers aged 16 to 19 are four times more likely to be involved in accidents than older drivers. As young drivers gain experience, their premiums typically decrease.Type of Car
New, expensive, fast cars usually come with higher insurance costs compared to older, slower models. Check if your vehicle is considered high-risk, meaning it’s prone to theft or vandalism. For example, in 2004, the 1995 Honda Civic was the most stolen car in the U.S., according to a National Insurance Crime Bureau report. Discuss potential insurance costs with your agent before choosing a car to ensure it fits your budget.Driving Record
A clean driving record can help you secure lower rates. If you have violations, consider attending a driver's education class to potentially reduce your premium. Be aware that some companies may not insure drivers with poor records.Credit Score
Your credit score, or insurance score, also plays a role in determining premiums. Studies show that financial management can predict potential insurance claims. People with lower scores are statistically more likely to file claims, which can increase their premiums.Deductibles
Choosing a higher deductible can lower your premium. Opt for the highest deductible you can afford to maximize savings.Shop Around
Underwriting guidelines can vary slightly between companies, so it’s beneficial to obtain and compare quotes from multiple insurers.By understanding these factors, you can make informed decisions about your auto insurance and potentially save on your premium.
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