Having more money in your bank account is always a good thing, and saving on your car insurance premium can help you do that. But what do car insurance companies consider when calculating your insurance premiums? Understanding the factors that go into setting the price of car insurance can help you get the best possible rates. The car you drive is a major factor in the cost of insuring it. Other variables include the probability of theft, the cost of repairs, and its age. If you drive less than 12,000 miles a year, you may qualify for reduced rates.
Some insurers even offer pay-per-mile auto insurance where you pay a monthly base amount, plus a per-mile charge for each additional mile traveled. Airlines may offer discounts to teens or older adults based on their age or for taking road safety courses; some carriers, such as AAA, offer discounts to students for maintaining a grade point average of 3.0 or higher. Employers and organizations often offer car insurance discounts for their employees or members, so check with your boss and the groups you belong to. Farmers Insurance even offers discounts for alternative fuel vehicles. Just like your credit score, car insurance companies track your car insurance history. A car, whether it's coming off the assembly line or new to you, can be one of the biggest investments you make.
Insurers evaluate many factors, including your driving history, when calculating your premium. Your insurance rates are also determined, in part, by the type of car you drive. In general, the harder it is to steal your car and the less expensive it is to repair it, the less you'll pay for insurance. If you're looking for ways to lower your monthly costs, it might be a good idea to see if you can save on your car insurance. Insurers not only look at how safe it is to drive a particular vehicle and how well it protects occupants, but also how much potential damage it can cause to another car.
By installing a technology device in your car that records your driving activities, insurers can use this information to customize your insurance premium. A basic car insurance package usually includes liability coverage to protect you, as well as collision and comprehensive coverage to protect the vehicle. When you file an auto insurance claim, the deductible is the amount you must pay before the insurer's coverage goes into effect. If you exchange an old vehicle for an elegant sports car, it's logical that you pay more for insurance because replacing your new car would cost more. So living in sunny Los Angeles could have a different impact on your rate than living in a place like Chicago, where winters are known to be brutal. Unless you're willing to get married, move to a new city, and change jobs in search of lower car insurance premiums, demographics aren't something you can change. So, if you live in a big city like Philadelphia with more cars on the road, where accidents and vehicle thefts may be more common, you could pay more for insurance than if you lived in a rural city.
Root Insurance goes one step further by using an app to assess your driving during a trial period and bases your premiums on what the test reveals. Because of this, places like California, Hawaii, Massachusetts, Montana, Pennsylvania, North Carolina, and Michigan have limited auto insurance companies to consider gender when calculating driver rates. If you have an old car that isn't worth much, for example, you can save some money by reducing or eliminating collision and comprehensive insurance coverage. Compare and ask your insurance representative for more information about the options below and other savings opportunities.