Car insurance is something that every driver should have, both for protecting their investment and their livelihood. Calculating car insurance rates may be a complicated formula but understanding the four major factors that affect your rate does not have to be.
The single most important factor affecting your rate, or premium, is your driving record. Speeding tickets and their severity play a major role in determining how much you will pay for car insurance. Most states maintain a points system where a driver will lose points based on the magnitude of a speeding ticket. Drop below a pre-determined threshold and your insurance will likely be canceled. Obtaining insurance from a different provider will cost you dearly at this point. DUI's and DWI's are another infraction that will certainly cause your rates to increase dramatically. Wrecks and other claims against your insurance contract also provide grounds for a provider to change your rates. Of course, if you have a spotless driving record, a provider will likely offer you some discounts and give you the ability to shop for the best car insurance rates.
A person's age is the next highest factor. Young teenage drivers typically garner a much higher rate than someone aged forty years old or above. However, drivers on the other end of the age spectrum do not necessarily get the best rate. Older drivers, people over the age of 65 years old, also have higher car insurance premiums. Gender and marital status can also factor into your car insurance rates. Married women on average pay lower rates than unmarried men.
The type of car you drive provides another input. If you own an expensive car or a large vehicle that can create a large amount of damage if it's in a wreck, this will be reflected in higher car insurance premiums. Insurance providers also take in account a car's national safety rating. Safety devices such as anti-lock brakes, front air bags and side air bags help lower your car insurance rates. Even if your car is inexpensive but has an engine with a large amount of horsepower, insurance rates could climb. The attributes of the car that could cause a wreck or claim and replacement costs both for your vehicle and others.
One last factor is the area in which you live. Rates for owning a car a large city are much higher than other smaller towns and cities. National theft rates and the amount of claims filed in these areas play a part in calculating car insurance premiums.
There is not one simple step in securing inexpensive car insurance. All of the factors discussed above play a part. Being aware and informed offers your best chance of getting the best rate.
