Two drivers in any state who might stop each other in passing to compare their automobile insurance rates might wonder why one driver’s insurance premiums are lower than the other. There are several major factors that influence what a driver pays for his car insurance on an annual basis. Knowing what these factors are can often help a driver obtain the lowest car insurance rates possible because there are certain factors they can control which can help to contribute to a lower insurance premium.
The Lower the Risk the Lower the Car Insurance Rate
Car insurance companies determine their rates based on the risk they calculate that they are exposing themselves to when they agree to coverage for a specific policy holder. The less the risk that the insurance company will have to pay off a claim, the lower the car insurance rate, and the higher the risk that the policy holder will file an accident claim, the higher the rate to obtain a policy. The amount of coverage a driver obtains, along with the amount of the deductible he chooses, meaning the amount he pays out of his own pocket first before the insurance company begins to contribute their share, has a big influence on car insurance rates. Higher deductibles automatically mean lower rates, although drivers should ensure that they have the funds necessary to cover the deductible amount should they need to file a claim.
Car Insurance Rates and Your Kind of Car
The kind of car you drive is another big factor on whether or not a driver can quality for the lowest car insurance rates. This is important to know if a driver is in the market for a new vehicle or wants to upgrade from their current automobile to a more recent car with a lot more features. All vehicles are assigned safety ratings based on their past performance. Because some cars are more susceptible to being stolen, being damaged in a collision or causing injuries to occupants following a crash, it’s difficult to obtain the lowest insurance rates for coverage on these makes and models. Older and more economical cars, however, don’t automatically receive the lowest rates because they are often more expensive to repair and don’t include the latest safety devices that newer car models are equipped with that makes them safer to drive, decreasing the risk that damages will occur in the event of an accident. Before investing in any car, a driver should investigate the driver and passenger protection rating of that vehicle and how that might impact auto insurance rates.
Driving Habits and Car Insurance Rates
A driver’s driving habits, including how often they drive their automobile and how far they drive, also impact auto insurance rates. The lowest car insurance rates are reserved for drivers who don’t rack up many miles or go long distances in their cars because this pattern decreases the likelihood they will wind up in an accident and need to make a claim. Where the car is driven can affect insurance rates, with rural areas entitled to the lowest car insurance rates and high crime urban areas charging the highest. Most insurance companies take into account where the driver lives and where and how they park or garage their automobile, as certain zip codes in the nation statistically demonstrate the highest crime rate when it comes to car theft, traffic accidents and vandalism.
Drivers who can prove that they are accident free and have not received any ticketed violations within the past three to five years are also in the category of insurance customers who get the best breaks on low car insurance rates. The age, sex and marital status of the driver also influences insurance rates, as young males under 25 are in the highest risk category, with married females among those with the least risky behavior and lowest rates. Although many people believe that the color of a vehicle influences whether the insurance rate is high or low, such as red and yellow cars receiving more speeding tickets or black cars being more likely to be stolen, insurance vendors do not take car color into account when determining if a driver is entitled to the lowest car insurance rates.
Auto Insurance Discount Programs
While drivers may not be able to change their age, where they live or the amount of miles they need to drive annually to influence their car insurance rate, they can help to get the lowest rates by qualifying for several discount programs offered by most major insurance companies. These include discounts for a good driving discount as well as good grades in school, having multiple policies with the same insurer, insuring more than one vehicle on the same policy and successfully completing a driver education course.