What Affects Your Car Insurance Premiums?

car insurance premiums
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There are a multitude of factors that go into determining your car insurance premium. The cost of your auto insurance will be determined by the amount of coverage and types of coverage chosen. The type of car you drive, where you live, your driving record, how much you drive and your age will all be factored in. The insurance company you choose will also play a big role in determining how much your car insurance rates will be. Let’s take a look at all these factors.

Type of Car You Drive

The more expensive your car is, the more costly it will be to repair. You can expect to pay a higher premium than if you were driving a less expensive car. How much you drive will also be a factor.

Where is your car located? Heavily populated areas tend to see more accidents, crime, and vandalism, so you’ll have higher rates. If you live in a rural area, the opposite would be true and you would see lower rates. Also, what state you live in will be factored in. Some states have higher medical care and litigation costs, causing higher rates.

Your Age

Statistics show that younger more inexperienced drivers tend to get into more accidents giving them higher rates than an older person with a clean driving record. Women, on the other hand, tend to get into fewer accidents, so in most cases, their insurance premiums will be less than their male counterparts’ insurance premiums.

Your Driving Record

This one is pretty obvious. If you have a clean driving record, with no violations and accidents or claims on your policy, you will most likely be viewed as a safe driver and your insurance rates will be lower. If you are someone who has had a lot of accidents or violations, you will be viewed as a higher risk and will pay higher insurance rates

How Much You Drive

Someone that puts a lot of miles on their vehicle can expect to pay higher rates. You will be putting more wear and tear on the car and the more you drive, which will increase your chances of being in an accident. If you drive fewer miles, your rates will be lower.

The Insurance Company

Even if you are happy with your current insurance provider, it’s not a bad idea to shop around to get two to three quotes from other providers. You may find that you can save money with a new insurance company or you may find that your insurance is already giving you the best deal which will provide you with a little peace of mind. All insurance companies should provide you with a free quote. But it’s not just about price. Always make sure any quotes you get are for the proper coverage.

Getting Quotes

Do your research and make sure that you are getting quotes with the same coverage options. You’ll be able to see who is giving you the best price by comparing apples to apples.

Here are some things to keep in mind.

Before they can give you a quote, insurance companies will ask you to provide specific information which includes personal information, vehicle information, your driving history and your previous or current Insurer. You should have this information on hand before contacting an insurance company.

By working with an experienced Independent Insurance Agency like Malhotra & Assoc. Insurance, you can save time and money. Our agents can obtain quotes for you from multiple insurance companies and explain the details of each quote.

Information You’ll need to Provide to the Insurance Agent

Personal Information – Date of birth, address, your occupation, marital status, and drivers license number. You will want to provide the same information for everyone that needs to be on the policy which may include your spouse or children.

Vehicle Information – Make, model and year of the car you already own or are looking to purchase, along with the date purchased. You’ll also be asked to provide the Vehicle Identification Number (VIN).

Driving History – You’ll need to include any insurance claims, traffic violations or tickets and if you’ve completed any driving courses.

Previous or Current Insurer – They will want this information for yourself and anyone you want included on the policy, or every driver in your household.

What Liability Coverage will you need?

There are three types of Liability Coverage:

Bodily Injury Liability – Bodily Injuries Per Person you injure in an accident.

Total Bodily Injury Liability – Total of All Bodily Injuries you cause in a crash.

Physical Damage Liability – For Property Damage You Cause in a Crash, Including Vehicles or Objects.

You will see this expressed as 50/100/50 or 250/500/250. These numbers are expressed in thousands of dollars. So, 250/500/250 would look like this: 

$250,000 for Bodily Injury Liability

$500,000 for Total Bodily Injury Liability

$250,000 Physical Damage Liability

*When comparing quotes, make sure the Total Bodily Injury Liability amount is equal to or greater than the total value of your house and your total savings combined.

Each State may have different minimum requirements for the amount of insurance you need. Insurance agents will be able to help you with this information. Each insurance company should already have the minimum requirements for your State in their system.

Do You Need Collision and Comprehensive Insurance?

Liability coverage alone does not cover your car or injuries sustained by you or a passenger in your vehicle if you are involved in an accident. Most insurance companies will also suggest having Collision and Comprehensive Insurance policies as well as Liability Insurance or ‘Full Coverage’ for your vehicle.

Collision Auto Insurance will cover:

  • Damage to your car in an accident you cause.
  • Damage to your car if you hit an object such as a mailbox or sign post.
  • Damage to your car if someone else hits you. Another option in this case is to make a claim against the other driver’s liability insurance.

Comprehensive Auto Insurance will cover:

The value of your car if it’s stolen and not recovered, and damage from other factors such as:

  • Weather – tornadoes or hail
  • Floods
  • Fire
  • Falling objects
  • Explosions
  • Hitting a deer with your vehicle
  • Vandalism

These are only a few examples.

Once you’ve collected all your quotes from insurance companies in your area, you’ll be able to see who will be able to give you the best deal. Make sure you are comparing the same coverages for Liability, Collision and Comprehensive insurance. You’ll want to get quotes from Regional Insurance Companies as well as the larger National Insurance Companies. Once you’ve narrowed it down to one or two companies, search for customer reviews online to see how responsive and reputable they are before you make your final decision.

The insurance experts with Malhotra & Assoc. Insurance is here to help you find an insurance policy that works for you. Give us a call today to learn more about your car insurance options!

Disclaimer: This blog post is meant for general informational purposes only and may not reflect your specific policy.

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