There are many different costs involved with owning a car, from fuel and tax to parking and maintenance. Then, of course, there’s auto insurance and some policies are expensive while you can still obtain cheap car insurance with certain providers. In most cases, this is required by law in order to drive your vehicle and is there to help you cover costs if you’re unfortunate enough to be involved in a collision. There are a surprising number of factors that influence the amount you have to pay in premiums because ultimately, what the insurers are attempting to do is work out how likely you are to make a claim and then adjust their prices accordingly.
The following are some of the main details that companies take into account when offering you a quote for car insurance. Remember that regardless of your personal situation, the price will also be affected by the type of coverage you choose, as well as your limits (how much the policy pays out) and deductibles (how much you pay towards a claim).
Firstly, there’s the actual vehicle that you drive. An insurance company will look at factors such as the age, model, make, and value of your car, as well as any modifications you have made to it (for example, this could be adding safety features or enhancing its power). You will usually find that a more expensive and powerful car is more costly to insure, for example, because it’s more likely to get stolen or will be more expensive to repair or replace.
There are many different demographics that an insurer will consider when quoting you a price. These include:
- Your age – both younger people and senior citizens are likely to be charged more for insurance because they are thought to be higher-risk drivers.
- Your location – factors such as the local crime rate and the average number of claims people make in your neighborhood will be factored into a quote. This is why it’s often helpful to go with a local insurance company. So, for example, if you live in Colorado Springs, you should try to get your auto insurance in Colorado Springs.
- Your job – those who have a job that involves a lot of driving might be charged a higher rate because spending more time on the road increases the chances of having an accident.
- Where you park – for instance, a private driveway might be considered safer than parking on a busy street.
Your driving history
This is a big factor in determining how much your auto insurance will cost. If you have a history of driving offenses such as speeding or have made a lot of claims in the last few years, you will likely be considered a higher risk driver and charged a correspondingly higher premium. On the other hand, lots of companies will offer a no claims bonus that brings down the cost for people who haven’t made any claims in the past. Insurers will also often look at your driving habits more generally when giving you a quote. So, for example, if you drive a lot, you might have to pay a higher price because of the increased wear and tear on your car.