Why is your insurance premium as high or low as it is?
Statistically, drivers who are under the age of 25 have a much greater chance of being involved in an accident than older, more experienced drivers, so their insurance premiums are higher. Parents who add a teenaged driver to their insurance policy will also see a significant increase in their payments.
If you have any moving violations on your record or have been liable for an accident in the past, your car insurance premium will be higher than those of people who have better records. Depending on what state you live in, you may be penalized for these incidents for up to five years after they occur.
If you live in a busy, densely populated city you will probably pay more for your insurance than someone who lives in area known to have little traffic. As you might expect, suburbs and cities tend to have more accidents, so insurance costs will be higher for residents of those types of places. If you live in area with a higher than average rate of vehicle theft, you may also have to pay more insurance.
If you have a shiny, expensive, brand new car, it will be more expensive to repair in the event of an accident. Thus, your insurance will cost more. Unless your car has been paid off, you will probably be required to have collision insurance. Certain types of cars are also statistically more likely to be stolen, and can therefore contribute to higher insurance rates in that respect as well.
What can you do to lower your premium?One of the easiest ways to make sure you are getting the best insurance prices you can is to make sure you know what kind of coverage you're getting. Common types of insurance can include collision, liability, comprehensive, uninsured driver, and bodily injury coverage. If you take the time to learn about these different types of coverage and purchase only what you think you need the most, you can probably lower your car insurance premium.
If you have a less than perfect driving record, the best thing you can do is be careful and work to improve it. After a certain amount of time, if you have no further incidents, many insurance providers will lower your premium.
Taking care to make your car as safe and theft-proof as possible can also make a difference in your premiums. Features like air bags, anti-lock brakes, security systems, ignition and fuel cut-off systems, and hood and wheel locking devices can all help.
Not many people realize that simply being a good customer can end up getting you a lower car insurance premium. Being considered a loyal customer can be achieved by insuring more than one vehicle with a given company, adding homeowner's or life insurance, or sticking with that company for five or more years. If you have been with a company for a long time, it might be worth checking into whether they will give you a discount each year.
Increasing your deductible may be one of the simplest ways to lower your insurance costs. If you can manage to put away more money for emergencies and raise your deductible, your car insurance premium amount will probably be lower. It is important to make sure that you have that money saved, however, in case something happens and you need to pay it.
Many factors contribute to how high or low your insurance premium is, and many actions can be taken to lower it. In any case, it is never a bad idea to shop around and compare providers and to get help from professionals in the industry to improve your chances of getting the best deal you can.
By Kristin Cleveland