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You’re not alone if you’ve wondered how insurance companies set the premium rates you pay. The terms of policies can seem complex, so we’ve laid out the basics for those still exploring how it works. Your premium is affected by how much coverage you need and some personal factors like age, credit score, driving history, and facts about your vehicle. Underwriters use these factors to estimate the likelihood you may have an accident. So negative factors like low credit score or too short a driving history could increase your cost.
Finding the right policy for you starts here. Explore as much as you need – we’ll be here when you need us.
Insurance companies start with the assumption that you’re going to be driving in about the same way you drove in the past. You’re still you, so they tend to think that past accidents are a good predictor of future ones. Some of the things that can affect premium significantly are:
You can prove them wrong though: the longer you go without an accident or citation, the more your premiums will go back down. But if you have citations, moving violations, or accidents, expect the premium to reflect it.
However, not all insurers are the same. Some are more sensitive to driving history while others are less so. This means that the wider your search, the higher the likelihood you’ll find something reasonable.
Insurers also use credit scores in their calculation of premiums. While the connection between credit and driving might not be obvious, underwriters tend to think that your credit score forecasts what their business relationship with you might be like. Since your arrangement include ongoing financial transactions, your credit score is a factor in determining the premium.
There are insurance providers who work with drivers of all credit scores and who put less weight on credit score in their pricing. Those insurers are out there and Quotetopia works with many of them.
Similarly, drivers with good and excellent credit can look forward to lower premiums and even special discounts.
Because an insurance policy requires the insurer to repair or possibly replace your vehicle after an accident or theft, your vehicle is a primary factor in the determination of the policy’s cost.
In addition, insurers have observed over the years that certain types of cars are predictors of certain driving behaviors. So insuring a sports car that boasts rapid acceleration and suitability for aggressive driving will naturally cost you more.
The location where you will drive and store your car has a substantial influence on the cost of the policy. Automobile insurance is largely defined by state level laws, so rules and rates vary nationwide. Areas where natural disasters like hurricanes, flooding, wildfires, or salt air will naturally see those risks reflected in premiums.
Even within states, however, premiums can vary widely for similar coverage. So a wide search is most important for those who are subject to these premium increases stemming from factors outside your control.
Insurance companies start with the assumption that you’re going to be driving in about the same way you drove in the past. You’re still you, so they tend to think that past accidents are a good predictor of future ones. Some of the things that can affect premium significantly are:
You can prove them wrong though: the longer you go without an accident or citation, the more your premiums will go back down. But if you have citations, moving violations, or accidents, expect the premium to reflect it.
However, not all insurers are the same. Some are more sensitive to driving history while others are less so. This means that the wider your search, the higher the likelihood you’ll find something reasonable.
Insurers also use credit scores in their calculation of premiums. While the connection between credit and driving might not be obvious, underwriters tend to think that your credit score forecasts what their business relationship with you might be like. Since your arrangement include ongoing financial transactions, your credit score is a factor in determining the premium.
There are insurance providers who work with drivers of all credit scores and who put less weight on credit score in their pricing. Those insurers are out there and Quotetopia works with many of them.
Similarly, drivers with good and excellent credit can look forward to lower premiums and even special discounts.
Because an insurance policy requires the insurer to repair or possibly replace your vehicle after an accident or theft, your vehicle is a primary factor in the determination of the policy’s cost.
In addition, insurers have observed over the years that certain types of cars are predictors of certain driving behaviors. So insuring a sports car that boasts rapid acceleration and suitability for aggressive driving will naturally cost you more.
The location where you will drive and store your car has a substantial influence on the cost of the policy. Automobile insurance is largely defined by state level laws, so rules and rates vary nationwide. Areas where natural disasters like hurricanes, flooding, wildfires, or salt air will naturally see those risks reflected in premiums.
Even within states, however, premiums can vary widely for similar coverage. So a wide search is most important for those who are subject to these premium increases stemming from factors outside your control.
No junk mail. No spam. No cost.
Quotetopia is an insurance comparison site, not an insurance agency.
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