What Determines Your Car Insurance Premium?
Car insurance premiums can be very expensive. Knowing how they are calculated might help you save money.
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Driving History
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If you are a reckless driver or have been convicted of driving under the influence, the insurance company believes you are likely to do so in the future. This makes your insurance premiums higher than those of someone who has not been convicted of reckless driving.
Car Type
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If you car is expensive, it will also be expensive to repair. Therefore, your premiums will be higher. Inexpensive cars usually have lower premiums, since they have a smaller replacement value than expensive cars.
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Commuting
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If you commute a long distance to work every day,or otherwise are a high mileage driver, you are more likely to be in a crash. Therefore, your insurance premiums will be higher.
Highway Travel
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How much you drive on the highway can impact insurance rates. If you travel extensively on highways, your premiums will be higher since there are high accident rates on major interstate roads. If you simply use your car to drive across town, it may keep your premiums lower.
Age
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Car insurance companies find the age of a driver has implications on the likelihood of a crash. If you are a younger driver, your car insurance premiums will be higher than those of an older individual. There are discounts for having high grades, so this factor can be mitigated through hard work in class.
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References
- Photo Credit old vintage convertible image by Xavier MARCHANT from Fotolia.com highway image by Ekaterina Sidorenko from Fotolia.com
