What Affects Car Insurance Rates
Car insurance is a legal requirement of most jurisdictions to protect drivers and passengers from damage or injury in case of an accident. Coverage minimums vary greatly by state, from a very low rate of 10/20/10 in Florida to a substantially higher rate of 50/100/25 in Maine. The first number in the rate is the maximum amount per person that will be paid out in the event of injury; the second number states the total amount that will be paid out for all injuries; and the last number represents the total amount that will be paid out for property damage. In all cases of minimum coverage, liability insurance is all that is required to drive legally, but drivers who wish to maintain more protection can purchase higher liability coverage amounts.
Car insurance is a costly expense that drivers cannot do without and many will comparison shop at various insurance companies to procure the lowest premium amounts. While it is important to economize the cost of car insurance, it is just as important to ensure adequate coverage. Some companies that offer the lowest rates also offer the lowest levels of customer service, making it important to do sufficient research into a company before signing a policy.
Many factors can affect the cost of your auto insurance policy, such as the type of policy you select. Liability insurance is typically the lowest priced coverage as it only pays for damages to the other party's car and passengers in the event the accident is their customer's fault. Other auto insurance policy types, such as comprehensive and full coverage will cost more due to those policies paying out much more on claims. The better your insurance coverage, the higher the cost.
Drivers with a poor driving record will end up paying higher premiums. A history of traffic tickets, accidents, or lack of maintained auto insurance can significantly raise the amount of the insurance premiums. A driver with a clean driving record can often qualify for safe driver discounts with their insurance company, potentially saving them hundreds on their car insurance policy.
Cars that are used to drive less frequently are often eligible for discounts as well. Programs such as pay-as-you-go auto insurance fit your car with a device that tracks when and for how many miles a car is driven. This information is compiled by the insurance company to calculate your monthly savings and can easily add up to a 30% discount on premiums! Where you live makes a big difference in your auto insurance premiums as well. Areas that are considered "safer" are the ones with the fewest reported car thefts and accidents. The costs of auto repair and medical care in the region also factor into the cost of premiums for auto insurance coverage.
The driver's age is sometimes a considerable factor in the cost of auto insurance rates, as insurance companies know that more mature drivers are involved in fewer accidents and claims than are newly licensed young drivers. As a rule, drivers over the age of 25 are subject to an experience discount as long as they have a safe driving record. Some insurance companies also offer a discount to female drivers as they are deemed to be less reckless in their driving habits.
