Auto Insurance Rates: Know How They Work

2007-03-08 10:33:40

( Automobiles )



When it comes to insurance, be it health, life or automobile insurance, we all want a policy that is affordable. You certainly do not want to pay an exorbitant amount for coverage that you really do not need. And you do not want to purchase a cheap insurance policy only to find out you do not have enough coverage and you end up paying out of your own pocket to make up for the difference. Automobile insurance is no different. It pays to shop around and get an idea of the current auto insurance rates that are being offered by insurance companies.

One of the things that can help you to get one of the best auto insurance is to know how the rates are determined. Once you are familiar with the factors affecting auto insurance rates, you would have an idea how to cut costs and how to get lower interest rates. But first, shop around. The price on the exact same policy from one carrier can be dramatically different from another.

Your personal information determines your auto insurance rate. Your insurance company will ask for your age, gender and civil status to determine your risk level. This is a big factor that affects auto insurance rates. Your personal driving record is also a big factor. They look at prior claims you may have filed and they look for traffic violation tickets in your name. The better your driving record is, the lower your auto insurance rates will be.

Your residence is also a factor in determining your auto insurance rates. People who live in urban areas typically have higher premiums because there is elevated risk that they will be involved in a collision or their car will get stolen.

The type of vehicle you drive and how you use it greatly affects your auto insurance rates. If your vehicle is expensive to repair and maintain like a sports car, you should expect higher premiums than if you are driving an ordinary sedan.


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