The Factors Influencing Your Auto Insurance Premiums

Auto Insurance

It goes without saying that the auto insurance market is highly saturated and hence choosing the right policy could be very challenging. Some insurance carriers target the market by offering cheap insurance packages, while others try to capture the market  by offering a wide range of services and fully packed features. It is important to find the optimum policy that is cost effective as well as have sufficient coverage and features. It is important to understand the factors that influence the cost of the auto insurance. Some of the main factors that define your insurance premium are:

1) Your Age: If you are too young or a senior citizen then your premium will be noticeably higher than those of middle age. The data clearly suggest that those who are too young or too old are more prone to accidents.

2) Gender: Most insurance carriers charge lower insurance premiums for females. Statistics demonstrate that men drive more aggressively than women and hence are more prone to accidents.

3) Age and the type of your vehicle: The repair cost associated with new cars are often higher than the old ones, so the premiums for new cars are higher. High speed cars and sports cars also attracts a higher premium as they are more prone to accidents.

4) Leased vs Own Car: The premiums for own cars are always less than that of leased cars. In case of leased cars, in addition to the coverage you should also buy collision coverage which will make it more expensive than a fully owned car.

5) Your Car Usage: If your car is driven extensively everyday then you will pay a higher premium compared to a car that is sparingly used. Higher miles per day means greater risk of an accident.

6) The Co-pay: If you are willing to accept a higher deductible then your insurance premium will be less.

7) A good driving record: If you have a driving history with no tickets or accidents then you premium will be less.

8) The driving experience: Some carriers charge a lesser premium if you have good driving experience. However this is not a thumb rule and if you are from a country like India or the UK then your driving experience in that country will not count (right hand driving) and you might end up paying a higher premium.

9) Your state where you reside: Some states are more prone to natural disasters and hence higher risk, so premiums in certain states will be higher.

10) Safety features of your car: Features like anti-theft protection, ABS, front and rear air bags, and other safety features will result in lower premiums.

Consider all these factors and also talk to an agent before choosing a policy. It is also very important to know about auto warranty and the difference between auto warranty and auto insurance; learn more about it here

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I am Ajithkumar, an entrepreneur and a karma yogi. I live by the principle: "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do". So I do all the things I like with a willingness to accept responsibility for my actions. Connect with me on Google+