This is one of the most common questions of new car owners.
How much your car insurance costs is primarily based on historical risk
statistics. Once you get a ball park figure, you should compare several companies though because some companies are
more favorable to various types of drivers / vehicles.
In general several factors that make up your insurance rate include:
Your Age
Based on Accident Statistics drivers age 50-65 have the safest driving records and those less than
25 yrs old have the highest odds of having an accident. Therefore your age is a primary factor that determines how
much your car insurance will cost.
Married or Single?
Statistically, Single Drivers have more accidents than their married counterparts. So all other
factors being equal a single driver will pay more for insurance than someone who is married.
Your Driving Violations
If you have had a DUI or Left The Scene Of An Accident you will be faced with highly inflated
premiums at least in the short term. Careless driving and speeding tickets will also affect your rates as you are
statistically more likely to have an accident. There are insurance companies that look back as much as 5 years into
your driving records, so it can take some time to clear things up.
The Type Of Vehicle You Are Insuring
Obviously it's more expensive to repair some cars such as sports cars or high end luxury cars,
therefore they will be more expensive to insure. Additionally, high performance cards tend to be involved in more
accidents so they almost always have higher insurance costs. This is even more of a factor if the driver happens to
be a male under age 25.
Your Credit Rating
This one surprises many people, but over the years it has become an increasingly important factor
in determining car insurance rates. You should always get your 3 free credit reports each year to make
sure your credit history is accurate as mistakes in your credit history can be very costly.
Defensive Driving Course
An easy way to reduce your insurance costs is to take a defensive driving course. These can
normally be completed in just a few hours and can save you about 10% on your premiums in most cases.
Where You Live?
Crime Rates, Traffic Congestion and even Weather Patterns can affect your insurance rates. If you
live in an area that has high crime rates or frequent hail storms this can affect your comprehensive coverage
rates. Obviously, congested traffic areas with frequent accidents also carry higher associated risk.
Gender
Historically, women have been safer drivers than men but this has been changing slightly due to the
fact that more women are driving more hours than ever before.
Any Accident Claims?
If your driving record is clear and you haven't had any recent accidents then you will qualify for
lower insurance premiums. In fact, many companies will lower your premiums when you are "accident free" for certain
periods of time (these vary from company to company).
Good Student Discounts
There are also many companies that offer good student discounts as it has been shown that students
who perform well in school statistically have fewer accidents.
What Is Your Occupation?
Your car insurance rates can also vary based on your occupation. There is statistical trends that
show particular occupations tend to lead to higher accident rates. Also in certain occupations you will spend much
more time driving. Remember the Dominos fiasco when they used to offer Guaranteed 30 Minute Delivery or your pizza
was FREE?
Your Level Of Education
Having more years of higher education can lead to lower premiums in addition to getting discounts
for being a Good Student.
What Type Of Car Insurance Coverage You Want
Perhaps the biggest factor is the level of coverage you decide to purchase. Do you just
want liability or do you want full coverage? How much car insurance you need is the first thing you
will want to determine.
Liability coverage is mandatory in most states so be sure to check with your
local agent or your state insurance commissioner's web site to determine up to date information for liability insurance requirements for
your state.
The Insurance Information Institute (iii) recommends carrying at least a 100/300 car insurance
policy. This covers you for:
$100,000 of bodily injury protection per person
$300,000 of bodily injury protection per accident
This is more than most state requirements.
Collision and Comprehensive Coverage is usually optional unless you have a loan on
the vehicle and it's required by the lender. In this case you need to consult the lending agency to make sure
you meet their requirements.
How Much Is Car Insurance Summary
There are many factors that affect the cost of your car insurance, several of these factors
are within your control such as:
Your Driving Record
Your Chosen Occupation
The Type Of Vehicle You Drive
Taking A Defensive Driving Course
Your Credit History
There are also a couple that can't be changed:
Your Age
Your Gender
The main thing is to know how much liability coverage is required by your state and whether or not full coverage is
required by the lender. If your car insurance premiums are too high, maybe you should consider making some
changes such as a different vehicle.
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