Car insurance rates are a mystery to most people. They often seem like an arbitrary number designed by insurance companies to make you cringe and cover your eyes. However, your car insurance rate is actually based on a number of relevant factors including your location, your driving history, and more. Keep reading to learn about the variety of things that can impact your rate.
Demographic factors that insurers consider include your age, gender, marital status, and the location where you live and drive. Younger, less experienced drivers typically pay more for insurance than older drivers. Insurance companies support this sort of rate discrepancy using independent statistics about accident rates for different demographics. As mentioned before, your location also plays a role in your rates. If you live in an area with high rates of accidents, theft, and vandalism, you can expect to see higher premiums. Because these factors are not entirely in your control, you'll need to look elsewhere if you want to lower your rates.
The kind of car you drive will also impact your rates. In general, the more a car will cost to replace, the higher your premiums will be. So, for example, a brand new sportscar will cost more to insure than a seven-year-old sedan. There are also certain features that can lower your insurance rates. Built-in security features like anti-theft devices and anti-lock brakes can qualify you for discounts on your insurance in Alpharetta, GA.
How much your drive and your driving history can also influence your insurance rates. The more you drive, the higher your premiums will be because more time behind the wheel means you have greater exposure to risks. Someone who has a long commute to and from work every day will pay more than someone who only uses their car to run errands. One of the biggest factors that influence your premium is your driving record. People who have been in multiple accidents before will pay more than a driver with a clean record. New drivers who haven’t had insurance before will also have higher rates.
Coverage, Limits, and Deductibles
The insurance coverages you select can also impact the price of your premiums. The majority of states have auto insurance requirements, which includes liability coverage. Depending on which state you live in, coverages in a standard insurance policy are collision coverage, comprehensive coverage, uninsured motorist coverage, and personal injury protection. There are also optional protections that you can add to your policy, too. The other factors that will influence your rates are your limits and deductibles. The limit is the max that your policy will pay for a covered loss. The deductible is the amount you will pay before your insurance kicks in. All three of these factors will impact the amount you pay every month for your auto insurance. The more coverage you add to your policy, the higher your premiums will be. However, if you set your deductible higher, you will pay less for your insurance.
Contact us at Popular Auto Insurance to learn more about how car insurance rates are calculated and get your quote today!