More than a dozen factors are considered in calculating your insurance premium. Since different companies use different algorithms, it is not possible to explain exactly how your premiums are calculated, but you can become aware of the basic factors to understand the process better.
The Car – The Make and model of your car is important and has the biggest effect on your auto insurance premiums. 4-door cars are cheaper to insure than 2-door models. Other factors on your car include the built-in safety features such as air bags or Electronic Stability Control, and how well the vehicle has stood up to real-world driving and accident statistics.
Location – Where you live, or more specifically, where you park your car at night has a significant impact on your rates.Â Parking your car in your home’s garage, located in a safe neighborhood can provide lower rates than a car parked on a city street.
Driving History – Your driving history tells the insurance company how high of a risk you will be to insure. The more accidents and speeding tickets you receive, the higher your premiums will be, and if you have had a DUI conviction you can expect even more of a premium increase.
Credit Score – Your credit score serves as an example of your financial responsibility, and the higher your credit score is, the lower your premiums can be.
Personal Factors – Your age, marital status and what you do for a living are all factors in your car insurance premiums. Insurance discounts are available for married couples and many different employment fields, including emergency service workers, government employees and people involved in teaching or research occupations.
Yearly Mileage – The distance you drive your car each year tells the insurance company how much of a risk it will be to insure. Additionally, if most of your driving is during peak hours, your premiums will be higher than if you work a shift that allows you commuting between prime periods.
Insurance Claims – If you have a history of insurance claims or have been dropped by an insurance company for nonpayment or soft fraud, it is going to cost you more for your car insurance premiums. Insurance companies view a customer with several insurance claims as a higher risk for filing more claims than a person who has never filed a claim at all.