The auto insurance rates are determined by a number of factors. In some of the states, the state’s insurance commission that regulates the auto insurance carriers set the auto insurance rates. In other states, there are various factors that influence the auto insurance rates. Prior to buying auto insurance, it is best to compare rates offered by different insurance carriers so that you are in a position to settle for a good deal. A good deal means your auto insurance policy should provide adequate coverage and do justice to the amount you shell out as premium.
The factors that determine the auto insurance rates are as follows –
- Model of the car
If you are driving a vehicle that is very expensive, you have to pay more as premium. If your expense involved in repairing your car is astronomical, your premium will also be higher.
- Gender
Male drivers have to pay more as auto insurance premium as compared to female drivers because females are less prone to accidents.
- How do you use your car?
The more you use the car, higher will be the auto insurance premium that you will have to pay.
- Drivers’ age
If you are below 25 years and above 65 years, you are more prone to accidents and this makes your auto insurance premium escalate.
- Driving record
You must have a sound driving record and have less number of speeding tickets to your credit. You must have also violated driving rules less. Under such circumstances, you can demand an auto insurance premium that is less.
- Previous claims
Your auto insurance carrier will find out whether you have made any claims before. If it is found that you have made claims before and you were responsible for the accidents, you will be considered as a high risk driver. As such, you will have to pay higher auto insurance premium.
- Place where you reside
If you reside in a congested area or at a place where crime rate is high, chances of theft becomes higher. As such the amount you pay as premium also increases manifold.
- Type of coverage
It is mandatory to have liability coverage but if you want to avail more coverage than this, you will have to pay more. Collision, fire, theft, vandalism etc are some of the options you can avail.
- Deductibles
Paying higher deductibles will ensure that you pay less in auto insurance premium.
Following the credit crunch, a lot of anomalous activities have been reported in the auto insurance industry. The incidence of Barbecuing a Beamer, a common form of insurance fraud has increased over the months. In this the owner of the vehicle intentionally sets the vehicle on fire to claim the compensation.
from my friend doroty....
