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What Impacts the Cost of Auto Insurance?

What Impacts the Cost of Auto Insurance?

Like most people, you have some questions about car insurance. What factors go into determining how much I’ll pay for coverage? How can I keep my rates as low as possible? Can I even get a discount if I use certain providers?

Today, let’s discuss the different factors that influence your auto insurance. By understanding what impacts your premiums, you can take steps to lower your costs and get the best car insurance for your vehicle.

Factors That Affect Auto Insurance Costs

As a car owner, it’s important to be aware of the factors that affect your auto insurance price. Read on to learn about the most prominent ones.

1. Driving Record

Your driving record is the most significant factor that impacts how much you pay for coverage. Whether your record is tarnished with accidents, alcohol violations, reckless driving tickets, or not will affect coverage price.

2. Age and Gender

Typically, drivers in the younger age groups tend to be riskier than older drivers, so they’ll pay more for car insurance. Statistically, men tend to be more aggressive drivers than women and will pay a bit more for coverage.

3. Vehicle

Premiums can vary greatly depending on the type of vehicle you drive. For instance, sports cars are typically driven faster and thus have higher auto insurance rates. SUVs also cost more because they’re larger and provide a greater likelihood of injury in a collision with another vehicle.

4. Credit Score

Drivers with a higher credit score usually qualify for lower rates than those with poor scores. However, the level of insurance coverage you purchase is more influential on your rate than your score.

5. Location

Where you live dramatically impacts your car insurance rates. For instance, if you live in a city with high crime rates or where the roads are more congested, your premiums will be higher than someone living in a small town.

6. Usage

If you have a vehicle that you only drive on weekends, then it’s considered “casual usage” and may pay less than a car that you use every day of the week.

7. The Type and Amount of Auto Insurance Coverage

Typically, the more types of coverage you opt for (i.e., liability, collision, comprehensive), the higher your rates will be. This is because the insurer believes you are a greater risk. You should consider how much it would cost to repair or replace your car if it’s damaged in an accident before opting for extra insurance. If you rarely drive your car or don’t owe much on it, liability coverage may be all you’ll need.

The Takeaway

To get a good idea of how much you can expect to pay for car insurance, you must understand what impacts the cost. By understanding these, you can take steps to keep your rates as low as possible.

You might be interested in reviewing other kinds of vehicles that could fit your budget and style. CarExpert will help you choose the best for you.

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