Car Insurance holder underwrite policies to evaluate the risk provided to each insurance applicant. In this process, a person is grouped into a category, such as a high-risk driver, low risk, teenager or elderly. If this risk associated with the applicant is deemed too high, the application may be denied coverage altogether. After calculating the results, the insurance carrier will provide a price, which is based on the perceived risk posed by the driver.
1. This is also known as driver rating
Insurers use this rating as a way to measure how much it will cost to insure a particular person if a claim is made and how likely claims are to occur again in the future. This is often referred to as the financial liability that an insurer accepts. The tip is to maintain a safe driving record and avoid traffic accidents and you will go a long way towards getting cheaper car insurance.
2. Not all Insurance Companies Rate Drivers
Many providers use the same general metric but their algorithms that ultimately determine rates are quite different. One of the biggest factors that all insurers use in calculating premiums is the frequency of accidents. Once a person files a claim, insurance kicks in and accidents can cost many thousands of dollars, especially if death is involved. The more claims someone has filed, the more dangerous they are in the carrier’s eyes and the more likely they are to file a claim in the future. Thus, higher rates are imposed on these at-risk motorists. To keep rates low, avoid incidents and filing claims and you can save a lot of money on auto insurance. If you have had accidents in the past don’t worry.
3. Major Contributing Factors Affecting Car Insurance Rates
*Driving Record: Auto Insurers will look closely at how many citations and accidents you have been involved in.
Maintain a good driving record and watch your rates go down.
*The Location you live in: If you live in the city, you can expect to pay more than if you live in a rural location with less traffic.
* The Car You Drive: This is a huge factor that shapes rates. New and expensive luxury or sports cars have some of the highest insurance rates. On the other hand, used cars that are safe and inexpensive to repair have some of the lowest cost coverage. Get a boring used car and save on coverage.
*Marital Status: Married people pay less for car ins because they are considered more responsible.
* Your Age: Drivers under 25 can expect to pay roughly double for auto ins. The sweet sport for the lowest rate is between 32 and 62 years old.
4. Apply for all the Discounts you can
A great and smart way to save on car insurance is to apply for some discounts. If you have more than one vehicle, consider getting a bundle or multi-vehicle discount. You can also take a safe driving course and save around 5%. Other popular discounts are good student, military, and even teachers.
5. Shop Directly on the Web for the Cheapest Rates
The internet has literally taken over the world. It has also saved millions of people money on car insurance. Buying car insurance online is smart because you can find direct pricing at a rate that most brokers can’t match.