For new and experienced drivers alike, when searching for an insurance policy there is one pressing question: how much is car insurance? Unfortunately, this is not an easy question to answer. We all strive to get the best coverage we can for the most affordable prices, but there are a variety of different things that contribute to the premium you will be paying as an insured driver. To help you understand what price range you may fall into, and how your rates will compare relative to different car insurance policies, we’re decided to give you some insight into how car insurance rates are determined.
Rating Factors
The question you should really be asking yourself when you are shopping around for a policy is, “How much is car insurance for me”? Your policy will differ from the next driver’s based on a variety of rating factors that insurers use to determine rates. These include:
- Age: older, more experienced drivers tend to pay less for coverage
- Driving History: the cleaner your driving record is, the less car insurance will cost you. There is some overlap with age as a rating factor, as younger drivers will have a shorter, unproven driving history, which may contribute to higher rates
- Type of Vehicle: the make and model of a vehicle, whether it is manual or automatic, a 2-door or 4-door are all rating factors
- Vehicle Usage: if your vehicle is used for business as opposed to personal use, this could affect your premium
- Location: insurance rates fluctuate from location to location, due to the fact that some areas have a higher perceived risk than others
Essentially, how much your car insurance will cost is based on a variety of different rating factors that insurance providers use to try and calculate the risk associated with insuring you as a driver. The higher that risk is, the higher your premium will be. However, there are a few methods you can use to obtain lower rates than you would normally be offered.
How to Maximize Discounts
Many people aren’t aware that they may be eligible for certain discounts on their car insurance. Understanding these discounts and how you can leverage them in order to find lower premiums is the first step in finding the best coverage for affordable prices. Here are some common discounts that you should look into:
- Bundling Discounts: many insurance providers offer the option of bundling different kinds of insurance (car, life, home, etc.) under one insurance provider, which can often save you money
- Membership Discounts: if you are a member of a club or organization, you may be eligible for a discount as many have deals worked out with insurance companies. For example, CAA members are often given slight discounts on their car insurance
- Multiple Vehicle Discounts: much like bundling, insuring multiple vehicles with the same insurer can often decrease the cost of insuring each vehicle
- Alumni Discounts: Depending on what academic institution you went to, you may be eligible for reduced rates as an alumnus
“How much is car insurance?” may not be a simple question to answer, but with the right advice from an insurance broker, you can find the best coverage at the most affordable rates.
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