An auto insurance premium is generally calculated using a formula that assesses numerous risk factors. There are some details such as age, vehicle type, and driving record that can increase costs. Other factors, such as security devices and driver improvement courses, may reduce costs.
Age is generally one of the primary factors considered when the price of auto insurance is calculated. Teenagers and adolescents usually pay substantially more for coverage than older individuals. This is often justified by the fact that younger drivers tend to have the least experience and are considered more likely to make irresponsible decisions and to be involved in automobile accidents.
A person’s driving record can also have a major impact on her auto insurance premium. Drivers who maintain a good driving record for extended periods may be surprised with reduced rates one day. On the contrary, drivers who have been convicted of a single traffic violation may be subject to higher costs. Multiple violations almost guarantee that a person will pay more.
Factors related to driving are not the only ones that can affect a person’s auto insurance premium. Another primary consideration when calculating the cost of auto insurance is the type of vehicle that needs coverage. Vehicles that are expensive to purchase, expensive to repair, or that are commonly stolen tend to be subject to higher insurance costs. It must be remembered that a vehicle is a liability to an insurance company even when it is not being driven, because if damage or theft occurs the company may still be responsible for payment.
Location is a factor that can cause a driver to have a high auto insurance premium or save him money. Someone who lives in a city is likely to pay more than someone who lives in a small rural town. This is because the rural driver is usually subjected to better driving conditions and lower risk of theft.
People who take the initiative to protect their property may have a lower auto insurance premium than those who do not. Having a security alarm or using a manual anti-theft device may save drivers money. Some insurance companies also provide lower rates to individuals who keep their vehicles in a garage.
It is important for drivers to realize that, although an insurance company may be responsible to pay, making the company do so can equate to the driver volunteering to pay more too. Filing claims can have a major impact on a person’s auto insurance premium. It does not matter whether a claim is related to a driving issue such as a car crash or other damage, such as a tree branch falling on the vehicle.
Completing driving improvement courses may also help a person obtain a lower auto insurance premium. Generally, at the end of the course, individuals are given certificates. These may be submitted to an individual’s insurance company. It may be most effective if a person has experienced a price increase due to traffic violations, but there is a possibility that an insurance company may offer discounts to someone who has a clean driving record.