Different Factors That Influence Your Auto Insurance Premiums
When you apply for a new automotive insurance policy and get that rate back, you might wonder if they simply pulled a number out of thin air. It seems like a mysterious process, and the insurance providers do attempt to keep it that way. But there is a very clear metric they follow when determining what sort of policy premium to offer. Remember, insurance companies make money on the people that have insurance but never use it, and lose money basically any time someone actually has to trigger their coverage. So for them it’s all about risk management. Understanding the elements that go into their decision can help you avoid paying too much for insurance, and figure out ways to save even on an already low premium rate. Here are some of the different factors that influence your auto insurance premiums.
The type of car you drive is probably the most obvious factor, but it doesn’t work how you might think. Some people avoid buying flashy sports cars, because they think that will doom them to elevated insurance premiums for the life of the vehicle. While an expensive price tag will certainly keep you out of the cheap insurance rate, it doesn’t necessarily guarantee the highest price either. Insurance providers think about cars differently. They want to stay away from cars that are easy to steal. If you check the crime records, you’ll find it isn’t always the fanciest vehicles that are stolen. In fact, some of the most frequently stolen vehicles are family sedans. They aren’t flashy, which means it’s easier for the criminal to get away with it. And lots of people want them, so they’re easy to sell. So definitely check out that list before making your purchase.
The other determination insurance providers make when analyzing your vehicle is how expensive it is to fix. Accidents do happen. After all, that’s why you need insurance in the first place. So if you do face a fender bender or something worse, how expensive is your vehicle to repair? You’ll enjoy a lower policy premium if your vehicle is fairly common, and one of the major brands. So a sports car won’t necessarily be a detriment, as long as it isn’t a rarity from another country. This is also why you’ll find higher insurance premiums for hybrid or electric vehicles. Their systems are much more expensive to fix, especially those modern batteries. So even though you drive a dependable and low profile Prius, you might have a higher insurance premium than someone driving a red Ford Mustang.
There are also some personal factors that go into their decision. One thing the insurance providers have in easy supply is data about drivers. They can access a database that details literally dozens of points about drivers of any race, age, education and geographical location. So they’ll ask you for these details, and then determine how likely it is that you’ll get in an accident, speed while driving, follow the rules of the road, commute long distances or partake in drugs or alcohol before getting behind the wheel. You might be the exception, but they are going to charge you based on the standard for your ‘type’. It may not be fair, but it’s the only way for them to conduct their business. That’s why teenage boys are always more expensive to insure than middle-aged, married women. You obviously can’t change these personal details, so instead focus on doing whatever you can to minimize your risk factors. If you go to school, focus on getting good grades. Avoid tickets, and take a driving class to clean up your record if you have a spotty past. Make yourself look as good as possible before reaching out for semi-truck insurance quotes, and you should end up happier with the quote you receive.