The factors that affect a car insurance premium include age, gender, marital status, geography, driving violations, vehicle type, accident claims, credit rating, occupation, education, driving distance to work, miles driven each year, years of driving experience, business use of vehicle, current auto insurance status, theft protection devices, and multiple car/drivers on the policy. Some of these factors cannot be changed, but need to be explored when comparing quotes. Other issues can be changed in order to decrease potential premium amounts.

Factors that Cannot be Changed

• Age: Younger drivers are statistically higher risks for accidents and mishaps. Drivers under the age of 25 are considered to be the highest risk, while adults between the ages of 50 and 65 are thought to be the safest drivers based on claim statistics.
• Gender: Contrary to popular belief, females are statistically safer drivers. As more women try to multitask while driving, however, this statistic could change.
• Marital Status: The stability of a marital relationship seems to translate to safer driving habits, pushing premiums down compared to single drivers.

Factors that Can be Changed

• Geography: Areas with less traffic present with less risk of accidents. Also, areas with less crime are less likely to have reports of vandalism and car theft.
• Driving Violations: The larger the number of violations, the higher the premium can go. Violations can stay on your insurance record for five years.
• Vehicle Type: The economy models have lower premiums than more expensive cars with more expensive parts. Sports cars present higher risk and are insured based on that higher risk.
• Accident Claims: Accident claims increase insurance because insurance companies see the need to pay. Even accidents that are not the insured’s fault, such as a hit and run, can increase a premium if the insuring agency has to pay to fix the damage.
• Credit Rating: A credit rating shows reliability, stability, and the ability to pay premiums when they are due.
• Occupation: Certain occupations increase risk based on the increased use of the vehicle. Occupations also signify responsibility level of the insured.
• Education: A higher level of education saves on a premium as insurance agencies determine a higher level of responsibility and stability. Premium discounts are also given by some agencies for passing report cards for younger drivers.
• Driving Distance to Work: The longer the drive, the greater the risk of mishap.
• Miles Driven Each Year: The more a vehicle is driven, the more chances there are for an accident.
• Years of Driving Experience: More experienced drivers have learned to navigate difficult situations and have a better grasp of what to watch for.
• Business Use of Vehicle: The more use, the more risk.
• Current Insurance Status: The more insurance coverage, the more responsible the individual.
• Theft Protection Devices: Devices that deter claims are considered helpful.
• Multiple Cars/Drivers on Policy: Given the nature of insurance businesses, the more business, the better, and multiple car/driver policies present an increased opportunity to make money.

What to Do

With so many factors affecting the cost of insurance, it is best to shop around based on the individual set of circumstances. Individuals need to identify which factors could affect them most, either positively or negatively, and shop based on this information.

Collision Coverage
Collision coverage protects your vehicle from damage caused by contact with another vehicle or an object, such as a tree, light pole, or building. Many insurance companies offer three collision options. They are limited, basic, and broad collision. These three options will determine how much money will be paid by the insurance company to repair your vehicle as a result of an accident.

If you have limited collision, and you are found to be more than 50 percent at fault, your insurance company may not pay for any damages to your vehicle as a result of a collision. If you are found to be less than 50 percent at fault, the insurance company will pay for the damages, less your deductible.

If you have basic collision insurance, the insurance company will pay for any damages, as a result of a collision, regardless of who was at fault. You will be responsible for paying your deductible.

If you have broad collision insurance, the insurance company will pay for collision damages regardless of who is responsible for the accident. However, if you are found to be less than 50 percent responsible, your deductible amount will be waived. If you are more than 50 percent responsible, you will be responsible for your deductible.

Because basic and broad collision will cover your vehicle even if you cause the collision, they are more expensive than limited collision coverage.

Comprehensive Coverage
The other form of physical damage protection is called Comprehensive coverage. It is sometimes referred to as “Other than Collision” coverage. Comprehensive coverage covers your vehicle from any form of damage other than a collision with another vehicle or an object. This includes theft, fire, flood, vandalism, weather damage, and other circumstances that may cause physical damage to your vehicle.

Some insurance companies will not sell Comprehensive coverage without Collision coverage. Additionally, some may require that you have the same deductible amount for both forms overage.

Comprehensive insurance does have limitations and exclusions, which could vary from state to state or between different insurance companies within the same state. Some of the more typical exclusions include:

• Damage caused by improper care and/or irregular maintenance.
• Damage caused by normal wear and tear.
• Personal contents that are stolen from the vehicle are typically not covered, such as phones, purses and wallets, laptops, and music players.
• Vehicles that are used for income, such as taxis and shuttles may be excluded from Comprehensive coverage.

Both forms of coverage pay for damages or loss up to the market value of the vehicle. Market value is determined through Blue Book valuation. State law does not require that you purchase collision and comprehensive coverage for your vehicle. Therefore, if you have a vehicle that is older and does not have much market value, the benefit of these forms of coverage may not outweigh the premium and deductible amounts. However, lien holders will require that you provide both forms of coverage for any leased vehicles or vehicles with existing loans.

Automobile liability coverage primarily protects you when harm to other people or their property occurs. Several forms of liability coverage will also protect you as the driver, other drivers on your policy, and any passengers from expenses resulting from injuries or death.

Automobile Liability Coverage is required by law in most states. There are typically seven forms of liability insurance for automobile policies, although not all are available in every state and some are optional. You are able to decide the maximum limits for each coverage based on your individual needs.

The premium amount for each liability coverage is determined in part by the maximum amount of coverage selected.

Bodily Injury

Bodily Injury covers bodily injuries or death to other people and protects you from any lawsuits arising from an injury or death. Claims for bodily injury include medical expenses, loss of wages, and pain and suffering. Bodily injury does not cover you, other people on your policy, or your vehicle. It only covers personal injury to others.

Bodily injury has two monetary components: the per person maximum and the per occurrence maximum. A common limit for Bodily Injury is $100,000/$300,000. This limits the per person allowances to $100,000 with a maximum amount paid of $300,000 for each occurrence.

Bodily Injury coverage is required in nearly every state. You should choose limits that are greater than the total value of your assets. If your limits are too low, you will be held responsible for the remaining amounts through property liquidation, savings and retirement funds, or wage garnishment.

Property Damage

Property damage covers damage to someone else’s property caused by your car. Typically, the damaged property is another vehicle, but it may also include a fence, light post, or building. It also provides you with legal defense should someone file a lawsuit against you.

The amount of coverage limits the maximum amount paid per occurrence, such as $100,000. Similar to Bodily Injury, if you cause damage that exceeds the limits of your coverage, you will be held responsible for the difference through property liquidation, savings and retirement funds, or wage garnishment.

Michigan residents have an additional required coverage called Limited Property Damage. This liability coverage provides protection if you are at fault in an accident that causes damage to another person’s vehicle.

Uninsured/Underinsured Motorists

Uninsured and Underinsured Motorists coverage protects you, the insured members of your household, and your passengers from any injuries or deaths caused by another motorist who is either not insured or is underinsured. Depending on the insurance company, these two forms of liability coverage may be sold separately or bundled together.

The limits are similar to Bodily Injury. There is a per person maximum and a per occurrence maximum. If you, or any member of your household is currently without health insurance, this form of liability insurance will protect you should you be in an accident requiring medical attention and the other driver is without insurance or has insufficient insurance.

Uninsured / Underinsured Motorist Property Damage

Uninsured property damage covers your vehicle when damage is caused to your vehicle by an uninsured or underinsured motorist.  This insurance coverage is helpful when you do not have Collision coverage for your vehicle. In some states, your Uninsured Property Damage coverage will pay your Collision deductible.

Uninsured / Underinsured  Motorist Property Damage does not offer the same form of coverage and protection as Collision coverage and is usually not enough to cover all potential car repair/replacement costs. Additionally, it is only valid if you are involved in an accident caused by a driver without insurance or with insufficient liability insurance coverage. The amounts available are limited by state.

Personal Injury Protection Coverage

Personal Injury Protection Coverage provides for any medical, hospital, and funeral expenses for you, your passengers, or any pedestrians you strike with your car. This coverage is only available in certain states and the covered parties and amount of protection and deductible amounts may vary.

If Personal Injury Protection Coverage is available in your state, it is most beneficial to persons with who have limited health insurance or who is without health insurance. It is also beneficial to those persons who commonly carpool with others.

Medical Payments

Medical payments covers medical expenses to you and your passengers as a result of an accident.  You may also be covered as a pedestrian or bicyclist should a vehicle injure you, or while riding in someone else’s car. Medical Payments coverage is optional. Depending on your health insurance, this form of liability insurance may not be necessary.

Work Loss

Work Loss coverage protects you, drivers listed on your policy, and your passengers recover lost wages if you are unable to work due to accident related injuries.

Limits of Liability

The liability limits you choose will affect the premium amount for each form of coverage. There are typically seven forms of liability coverage, some of which are required by state law. The common liability coverages include bodily injury, property damage, uninsured/underinsured motorist, medical payments, personal injury, property protection, and work loss.

The limits for each form of coverage can be stated as a per person and per occurrence maximum or just a per occurrence maximum. For example, Bodily Injury has a per person maximum amount and with a per occurrence maximum amount of coverage. Property Protection coverage, however, is strictly a per occurrence maximum.

Liability coverage offers two forms of protection. Some of the coverages protect you and your assets from lawsuits by others for injuries or damage that you have caused while operating your vehicle. Other forms of liability coverage protect you, should another driver injure you.

When determining the maximum limits, you first need to understand the purpose of the coverage. If the coverage is to protect you from lawsuits, then at a minimum, the amount of coverage you purchase should be more than the total amount of your assets. If the purpose of the coverage is to protect you from injury or death caused by others, you may not need to purchase as much coverage if you have medical and life insurance.

Higher Deductibles

Higher deductible amounts for your Collision and Comprehensive coverages will also reduce your insurance premium. Deductibles are the monies you pay prior to any claim payments from the insurance company. For example, if your vehicle suffers $1,500 in damage and your deductible is $500, you will pay $500 and the insurance company will contribute $1,000 to the cost of the repairs.

Deductibles can be as low as $100 and as high as $1,000. The higher the deductible amount, the lower your premium will be for these two forms of coverage.

Participation in Discount Programs

Lastly, you can lower your insurance premium by taking advantage of discount programs offered by your insurance company.

A typical discount program is the Safe Driver program. Many insurance companies will reward drivers who have not had a claim or a traffic violation during the past six to twelve months with lower premiums.

The multi-family driving discount is another common auto insurance discount. Insurance companies will charge lower premiums to families that insure multiple vehicles, even if the vehicles have different primary drivers. The discount will be applied to the additional vehicles.

Multi-products is another discount. Insurance companies will apply discounts when you insure your home, boat or RV, and automobile through them.

Installing theft prevention or anti-theft devices on your vehicle will also lower your insurance premium. Even locking wheel nuts can provide a discount. Many vehicles are now being designed with anti-theft deterrent systems from the factory. Be sure your agent knows of any similar devices on your vehicle.

Find out if you qualify for any discounts through membership with either a professional group, a church affiliation, educational affiliations, including sorority membership, or through employer affiliation.

And lastly, many insurance companies will provide a discount to your policy if you sign up or renew your policy online, pay your premium in full, or use Electronic Funds Transfer (EFT) for monthly premium payments.

Compare Prices

Create a list of insurance issues, such as violations or age, and compare prices from company to company. Look in the yellow pages and start calling local agencies. Give them the requested information and let them call you back with a quote. Keep track of these quotes and any additional issues or charges each one notes.

Determine How Much Insurance is Necessary and how it Translates to Each Quote

Make sure that each quote is for the same amount of coverage. The same terms might mean different amounts based on what these terms mean in each company. Make sure the coverage is the same before making the comparison.

Take Insurance Limits Into Account

One policy might seem less costly upon first inspection, but it might change based on how much coverage is provided. If one policy is less per year, but provides $20,000 less in coverage, or a higher deductible, it might not be as big a bargain as it seemed.

How Much Coverage Do You Really Need?

A 2010 Expedition will understandably require some expensive parts to repair. A 2005 Cobalt, on the other hand, might need less expensive parts. Sports cars and large SUVs are more likely to need more coverage, while smaller, more economical cars might not need as much. Older model cars do not normally need as much coverage as new cars.

Higher Deductibles Mean Lower Premiums

When individuals opt for higher deductibles insurance companies reduce costs. Safe drivers who do not live in high-risk zones might want to go for a higher deductible based on less risk of need. If an individual lives in an area where accidents are common, or if the individual drives long distances, the deductible might come into effect more often.

Safe Driving

Having a good driving record is one of the best ways to drive down costs throughout the years. Insurance companies want to cover individuals who do not have claims, and are more willing to entice these individuals with savings and discounts.

Ask for Discounts

Many insurance companies offer discounts for safe drivers. They also offer discounts for having multiple vehicles/drivers insured under the same policy, and for having multiple policies with the same company. Many companies provide homeowners and renters insurance in addition to car insurance. When there are multiple policies to the same insured, there are often discounts.

It is a given that individuals must have insurance in order to drive a motor vehicle. Each state has its own policy on the minimum amount of coverage required. If there is a loan on the vehicle, the loan holder will also have minimum coverage requirements that must be maintained. The individual should use these requirements as the basis for comparison and shop around for the best deal.



There are two types of Liability coverage: (1) Bodily Injury Liability; and (2) Property Damage Liability.  Each is discussed in further detail below.

Bodily Injury Liability (BI)

Bodily Injury Liability coverage is third party insurance that is generally mandatory in most states.  It protects you against payment for bodily injury or death of others, as a result of your fault.  It covers injury only to third parties, not injury to you or other people included on your policy.

Bodily Injury Liability coverage covers injury to people, not damage to their property or to your vehicle.  Thus, most insurance companies will require that you have the same level of BI coverage for all of your cars.

Claims for bodily injury may include:

• Ambulance services
• Doctors fees
• Medical bills
• Physical rehabilitation costs
• Lost wages
• Pain and suffering.

BI coverage also provides for the cost of defending a lawsuit filed against you by another party in an accident.

Bodily Injury Liability coverage will look like this in your policy:

$10,000/$20,000

The first number represents the maximum amount your insurance company will pay for injuries to a single person in the accident. The second number is the total amount per accident, regardless of the number of people involved, that your insurance company will pay for injury damages.  You will be personal responsible for any amount exceeding this.

For example, if you purchase BI insurance limits of $10,000/$20,000 and you have an accident where two people in the other car each suffer damages of $15,000, the insurance company will only pay $20,000 total ($10,000 to each).  You will be personally responsible for paying $10,000 more ($5,000 to each).

Most people do not have this kind of “spare change.”  Thus, you need to carefully think ahead and purchase enough insurance to protect yourself as best you can.

Property Damage Liability (PD)

Property Damage Liability coverage, which is also required in most states, is third party insurance that covers you if your car damages someone else’s personal property, regardless of whether that property is a car, fence, house or any other property.  It also covers your legal defense if a lawsuit stemming from an accident, is filed against you.

Property Damage Liability coverage does not pay to repair or replace your own vehicle or personal items, but instead, the vehicle or property of others involved in the accident.  Thus, you should purchase enough PD insurance to cover the amount of damage your car might do to another car or object, regardless of the value of your own car.  Generally it is recommended that you purchase $50,000 in coverage per car you own.

Liability coverage:

• Protects you, your family and other operating your car against claims arising out of an accident for which they are at fault
• Coverage also extends to accidents cause by you or your family while driving a non-owned vehicle that you do not use on a regular basis

This coverage is required under state law in every state, although the minimum requirements vary from state to state.  Liability coverage can range from as low as $10,000 to more higher than $100,000.  In fact, liability coverage is generally available with limits up to $1 million.

The insurance company, of course, will not pay more than the selected amount of coverage for legal fees, medical expenses or property repairs.  Thus, any amount of damages that exceed your policy limits will become your personal responsibility.

In the event you are in a serious accident, you will want make sure you have enough insurance to cover a judgment against you in a lawsuit in order to protect your personal assets.  You will want to purchase liability limits to account not only for your current assets but also your future net worth.  Thus, you will need to take into consideration your assets, age, income and ability to pay higher premiums when determining the amount of liability insurance to purchase.

If the limits that you select are too low, you may be putting yourself at risk financially.  For example, if as a result of an accident, someone suffers serious injury and the damages exceed your limits, you will be personally responsible to pay the amount that exceeds your insurance limits.  In order to make that payment you may have to liquidate property, savings, and other assets, or your future earnings could be attached.

There are two primary components to liability coverage:

• Bodily Injury Liability
• Property Damage Liability

Bodily Injury Liability coverage protects the insured against payment for bodily injury or death of others, where the insured is at-fault.  Property Damage Liability coverage, on the other hand, protects the negligent insured against having to pay for damage to the other party’s vehicle or personal property as a result of the accident.

Both coverages pay for the costs of defending a lawsuit brought against the insured, stemming from the accident.

The factors that affect a car insurance premium include age, gender, marital status, geography, driving violations, vehicle type, accident claims, credit rating, occupation, education, driving distance to work, miles driven each year, years of driving experience, business use of vehicle, current auto insurance status, theft protection devices, and multiple car/drivers on the policy. Some of these factors cannot be changed, but need to be explored when comparing quotes. Other issues can be changed in order to decrease potential premium amounts.

Factors that Cannot be Changed

• Age: Younger drivers are statistically higher risks for accidents and mishaps. Drivers under the age of 25 are considered to be the highest risk, while adults between the ages of 50 and 65 are thought to be the safest drivers based on claim statistics.
• Gender: Contrary to popular belief, females are statistically safer drivers. As more women try to multitask while driving, however, this statistic could change.
• Marital Status: The stability of a marital relationship seems to translate to safer driving habits, pushing premiums down compared to single drivers.

Factors that Can be Changed

• Geography: Areas with less traffic present with less risk of accidents. Also, areas with less crime are less likely to have reports of vandalism and car theft.
• Driving Violations: The larger the number of violations, the higher the premium can go. Violations can stay on your insurance record for five years.
• Vehicle Type: The economy models have lower premiums than more expensive cars with more expensive parts. Sports cars present higher risk and are insured based on that higher risk.
• Accident Claims: Accident claims increase insurance because insurance companies see the need to pay. Even accidents that are not the insured’s fault, such as a hit and run, can increase a premium if the insuring agency has to pay to fix the damage.
• Credit Rating: A credit rating shows reliability, stability, and the ability to pay premiums when they are due.
• Occupation: Certain occupations increase risk based on the increased use of the vehicle. Occupations also signify responsibility level of the insured.
• Education: A higher level of education saves on a premium as insurance agencies determine a higher level of responsibility and stability. Premium discounts are also given by some agencies for passing report cards for younger drivers.
• Driving Distance to Work: The longer the drive, the greater the risk of mishap.
• Miles Driven Each Year: The more a vehicle is driven, the more chances there are for an accident.
• Years of Driving Experience: More experienced drivers have learned to navigate difficult situations and have a better grasp of what to watch for.
• Business Use of Vehicle: The more use, the more risk.
• Current Insurance Status: The more insurance coverage, the more responsible the individual.
• Theft Protection Devices: Devices that deter claims are considered helpful.
• Multiple Cars/Drivers on Policy: Given the nature of insurance businesses, the more business, the better, and multiple car/driver policies present an increased opportunity to make money.

What to Do

With so many factors affecting the cost of insurance, it is best to shop around based on the individual set of circumstances. Individuals need to identify which factors could affect them most, either positively or negatively, and shop based on this information.

In many cases, agencies that offer truck rentals have customers who do not simply need trucks for transportation, but for purposes such as moving, construction, towing and other large-scale jobs. There are various determining factors for a good deal on truck rentals, including what it costs to use the truck for certain amounts of time. For example, if you need to move furniture but think it will take you less than a week to finish moving, you may still decide that it is a good idea to rent your truck for a week rather than per day, especially if it is cheaper and affords you extra time that helps you spread out your work.

If you find that you have a choice between several rental agencies that offer you all kinds of services to accommodate you before, during, and after your move, you must then determine which agency offers you the best deal. In some circumstances, you may choose to pay for some agency services while leaving out others. For example, if you must move business equipment for which you will need immediate access, you may need a storage unit of your own alongside your new office or warehouse setting. Also, be sure to check out benefits offered to you in return for using a service, such as gift cards or special deals that last for the current season.

Do not hesitate to consult with as many professionals as necessary (via phone, email, fax or online chat) who can tell you all about what online car insurance offers when it comes to renting a truck. Rental agencies understand the needs that can come up for you when moving or towing and, for this reason, provide various services to make your job easier to finish in less time.

There are several ways to manage a cheap car insurance deal. However you must understand that whether you buy cheap car insurance or an expensive one, you are liable to get the same level of customer service. If you happen to have an accident where you have to file a claim, you will also have to go through the same process as a person who may have opted for a higher amount of insurance policy. You must realize that the cost of the California car insurance does not interfere with the quality of service provided. Now once you have decided on the insurance, you can also look for a few ways in which you can get the best deal out of a company. Here’s how:

Compare with several companies. You can log in to various insurance companies and fill in your details and ask for their quotation. Once they start mailing you the quotes compare them and find out which is the best deal for you.

You must inform your car insurance provider if you haven’t had any accidents in the last 5 years. This proves that you have a clean record of driving and hence he should consider that and lower your insurance premiums or give you a discount rate.

Opt for a defensive driver’s course. This could mean a few weekends at the driving classes and watching driving videos and learning the basics once again. But this would also be greatly beneficial in saving a lot of money in your insurance premium.

If you are looking forward to buying car insurance and want advice and tips on the same, visit CarInsurance.org for more details.