Car insurers write policies to assess the risk given to each insurance applicant. During this process, a person is grouped into a category, such as high-risk, low-risk, teen, or senior driver. If this risk associated with the applicant is deemed too high, the application may be purely and simply refused. Once the results are calculated, the insurance company provides a price based on the perceived risk the driver poses.
- This is also known as a driver’s rating
Insurers use this rating as a way of measuring how much it will cost to insure a particular person if a claim is made, and how likely it is that she will do so again in the future. This is often referred to as the financial liability that an insurer bears. The advice is to maintain safe driving and avoid traffic accidents and you will go a long way to getting cheaper car insurance.
- Not All Insurance Companies Rate The Same Drivers
Many providers use the same general metrics, but their algorithms that ultimately determine rates are quite distinct.One of the main factors used by all insurers in calculating premiums is accident frequency. When someone files a claim, insurance kicks in and accidents can cost several thousand dollars, especially if there is a death. The more claims a person files, the riskier they are in the eyes of the carrier and the more likely they are to file a future claim. Therefore, higher rates are levied on these risky motorists. To keep your rates low, avoid accidents and make claims, you’ll save a lot of money on car insurance.If you’ve ever had an accident, don’t worry.
- Top Contributing Factors Influencing Car Insurance Rates
Driving Record: Car insurers will look closely at the number of citations and accidents you have been involved in. Keep a clean driving record and see your prices go down. * Where do you live? If you live in the city, you can expect to pay more than if you live in a rural area with much less traffic. * The car you drive: This is a very important factor that determines rates. New and expensive luxury or sports cars have some of the highest insurance rates. On the other hand, used cars that are safe and cheap to repair have some of the lowest coverage costs. Buy a boring used car and save on coverage. * Married Status: Married people pay less for car transport as they are considered more responsible. *Your age: Drivers under 25 can expect to pay about double to register themselves. The ideal sport for the lowest fees is between 32 and 62 years old.
- Claim as many discounts as you can
A great smart way to save on car insurance is to claim multiple discounts. If you own more than one car, consider getting a bundled or multi-vehicle discount.You can also take a safe driving course and save around 5%. Other popular discounts are good students, military, and even teachers.
- Buy directly on the Web at the most advantageous rates
The Internet has literally conquered the world. It has also saved millions of people money on car insurance.
Buying auto insurance online is smart because you can find direct rates that most brokers can’t match.