The formula car insurance companies use can seem as mysterious and intractable as the meaning of life at times. It is not at all unusual for an individual to find that they are paying far more in car insurance than their friends and neighbors, even when their driving records are similar. One of the chief reasons for this seemingly unexplainable incongruity is the fact that each car insurance company uses its own formula to determine the risk each applicant poses, and that perceived risk has a profound impact on the premiums paid .
Many drivers are surprised to find that automobile insurance companies go far beyond an individual’s driving record when determining the premiums that individual will be required to pay. For instance where a driver lives can have a big impact on car insurance premiums. That is because insurers have found that some parts of the country simply have higher accident rates than others. If an exceptional driver happens to live in such an area, he or she will likely face higher premium rates, although not as high as they would if they were poor drivers. It may not be fair, but it is a fact of life in the world of car insurance.
Where the car spends the night can also have an influence on premium levels. Cars that are kept in the garage overnight are typically less likely to be stolen or damaged, and that fact is reflected in the premiums. Anti-theft features like car alarms and tracking devices can also lower premiums for comprehensive coverage. And of course safety devices like side airbags can help keep premium costs low as well.
The type of car is always a factor when it comes to automobile insurance, and it is a good idea for those contemplating the purchase of a new or used car
to check insurance rates before completing the purchase. For instance, most people understand that sports cars are typically more costly to insure, but some insurance companies classify some unusual vehicles as sports cars. By knowing the car’s classification ahead of time car shoppers can figure in all the costs of ownership – including the cost of insurance – and make a wise choice.
In addition to the automotive factors cited above, many car insurance companies use an individual’s credit score to help determine the premiums they must pay. Many applicants are surprised to find that a low credit score can result in higher premiums, but it is important to be aware of this possibility. Individuals who are concerned about the impact of their credit on their insurance application can ask the company if they factor an individual’s credit score into their equation – there are a number of companies that do not use this type of criteria.
It may not seem fair for a car insurance company to use an individual’s credit score against them, but those companies that use the score cite studies that show a correlation between poor credit scores and risky driving behavior. There are already many great reasons for improving a poor credit score – lower car insurance premiums are just one more.
Finding affordable car insurance can be a difficult task, but it is important for drivers to get the best possible coverage for their vehicles. Driving can be a risky endeavor, and it is important for drivers to protect themselves and their families with the right coverage. The good news is that by shopping around drivers may be able to save themselves hundreds of dollars a year, and the answer is as close as the computer.
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