Factors considered in determining your car insurance premium

Today most states require you to have some form of car insurance if you are to drive a car. The monthly rates that you will be paying for that insurance are calculated by assessing the potential risk of insuring you. These are some of the factors that insurance companies have to consider when formulating your premium.

Age is one of the important factors. Teenage drivers are considered higher risk, as they are still inexperienced are more likely to be reckless. They also didn’t have the chance to create a driving record, so the company has no way of knowing how reliable they are. However, there are a number of discounts that they can qualify for. One of the ways to reduce their premiums is applying for different training courses that, once passed, will make them eligible for a discount. Some states also offer these discounts to students that have excelled at their studies, as they can be considered more responsible. They can also place limitations on young drivers that further reduce the risk, such as no driving after dark, or not allowing them to have someone else in the car with them. They are generally not considered a higher risk group once they reach 25 years of age. The situation is similar with senior citizens over 65 years of age, due to their health condition, reflexes and poorer eyesight.

Your marital status is also considered when your premiums are being calculated. Married people will generally be considered to be less of a risk. Your driving records are, unsurprisingly, another important factor. Logically, people who have good records and have proven themselves as responsible drivers that are not prone to accidents are much more likely to have low insurance premiums. You are given some leeway with this, but if you have too many violations, or if you get involved in accidents with a lot of damage to property, or with injured parties, your premiums can skyrocket in an instant.

The type of the car that you are trying to insure will, naturally, have a great influence on your premiums. If your car is rather expensive the premium will reflect that fact as the repair on the damages on an expensive car can be quite costly. Likewise, if your car is capable of achieving great speed the risk of you getting into an accident is greater, and the increase in risk is always followed by an increase in the premium.

Lastly, the average mileage that you are crossing in the car can also have large influence on your monthly rates. The logic behind this being, the less you travel, the lesser is the risk of you getting into an accident. Some companies don’t just consider the mileage, but also your route. If you are commuting every day to work it is expected that you are comfortable with the route and that you are not likely to have an accident on it.


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