Things that determine how much you will pay for your car insurance

Things that determine how much you will pay for your car insurance
Things that determine how much you will pay for your car insurance

There are a few reasons why you should be aware of everything that goes into calculating how much you are going to pay for your car insurance. For one, it can be interesting to see what they have thought of in order to make the calculations as precise as possible and it also provides you with a chance to make certain adjustments that are going to lower your costs. Of course, in an article as short as this one, it is impossible to give you details about all of the factors, but we will try to cover at least the most important ones in detail.

As you would imagine, the most important factor that plays the crucial role in your premium calculations is the coverage itself. Namely, depending on the amount of coverage you wish, the prices will vary. For more contingencies covered, the prices will be higher. Also, the deductibles play an important role in determining the premiums. If the deductibles are lower, the premiums are higher and conversely. Therefore, you should make sure to balance this out and to get exactly the coverage that will meet your needs.

The next thing that determines how high your premiums are going to be is the car that you are insuring. If the car is a sports car or an exotic car, you will find that the premiums are higher, for a few reasons. The first reason is that these cars are usually much more expensive than “regular” cars and that the damage to these cars costs much more to be repaired. Also, replacing these cars can set the company back for tens or even hundreds of thousands of dollars. Furthermore, these cars are far more likely to be driven irresponsibly. These cars are made for speed and performance and the insurance companies hold the right to assume that you will be using them in this way which is much more prone to cause damage to the car and the holder of insurance. It should also be pointed out that certain types of cars and certain makes are capable of lowering the prices of premiums substantially.

The third factor that plays a huge role and that you can do a lot about are your driving history and your driving habits. Insurance companies are going to charge higher premiums to people who have been involved in a number of accidents, who have a lot of tickets and who are generally considered to be high risk drivers. What you can do is drive responsibly and make sure that you minimize the number of accidents, tickets and other instances that would increase your premiums.

Now that we have covered those factors that can be changed and that can be modified in order to lower the premiums, we will now be talking about several of them that are either impossible to change or extremely difficult to modify in any way that would make sense when you consider that it is car insurance that you would be doing it for.

The first one of these is your age. Young drivers (under 25) are generally considered to be high-risk due to a number of factors and for them; the premiums are generally much higher than for those who are over the age of 2

  • We will be talking about the special car insurance policies for young drivers in a separate article.

    Another similar factor is the gender. Namely, contrary to popular belief, women drivers are considered to be lower risk because they are statistically far less likely to be involved in accidents. This is why insurance premiums for female drivers are on average somewhat lower than for male drivers. An interesting fact is that the EU has made this illegal. Namely, the insurance companies in European Union are not allowed to charge men more for car insurance just because they are men. It is considered gender discrimination and it was pronounced illegal.

    The marital status of the insured party is also a factor. Married individuals are found to be safer drivers and their premiums are lower than those of single people. However, marrying just in order to get lower premiums is not something that makes too much sense which is why we categorize it as something that is not actually changeable.

    It also needs to be pointed out that certain insurance plans make a distinction between individuals that are likely to use their cars to cover longer distances often and in such cases, you might find that your premiums are higher as a result of you being more likely to commute regularly and for longer distances.

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