Factors That Affect the Rates of Your Car Insurance

Calculating car insurance

Having  a good insurance policy for the car you drive is an essential part of owning a vehicle. Dealing with a company that gives great customer service and knowing that your policy will be honored when needed, is something all car owners strive for.

Car accidents are more common than anyone would like to believe, but having a good car insurance policy will give you the peace of mind you need. Whether you or a loved one gets involved in a road accident, your car insurance plan should be able to cover any medical bills and car repair costs. 

However, finding the best insurance plan that you can comfortably afford is a daunting task. Many details go into finding the right provider, especially that there is a number of insurance companies out there that don’t deliver on their promises. If you are looking for a good insurance plan and want to compare different providers, you need to learn about the variation in rates. Below, we will discuss some of the factors that affect your car insurance rates.

The State of Your Car

This is one of the first variables that a car insurer will consider when estimating your insurance premium. You can easily get a favorable insurance rate for your brand new car than you would for an old shabby one since it bears less liability. Insurance providers need to guarantee their profitability, so covering an old car that needs to be repaired every couple of months can be a waste of their resources. However, if your car is in a poor condition, you can still get the coverage plan that you want, but you need to accept the higher rates you will be charged. 

Your Home Address

Statistics have shown that most car accidents happen closer to a person’s home. So, if you live in a populous neighborhood with high traffic, you will probably be charged higher than others who live in calmer areas. In Canada, drivers who live in the relatively slow-paced city of Quebec have access to cheaper car insurance than those from bustling Ontario. So, unless you are willing to relocate to save on your auto insurance costs, you will have to do thorough research to make sure you’re getting the best deal in your hometown. 

Your Credit Score

Although there isn’t a direct correlation between your credit score and the car insurance rate you are offered, somehow it’s one of the important factors. Insurance companies use your credit score history as a way to evaluate how much of a “responsible” person you are. Although it might sound completely irrelevant, if you think about it, it can be an indicator that implies how big/small of a risk you will pose as an individual. 

Driving with car insurance cover

Your Typical Commute

The longer you drive your car, the chances of getting into an accident are high, and eventually, the more it will cost you to insure your car. It’s a straightforward assumption that insurance companies use when evaluating the rate they should charge you. If you want to lessen the weight of this factor, you can take public transportation for your long work commute and save your car for other errands. Giving up the comfort of course won’t be easy, however, when you see how much you will be saving with this small adjustment, you will judge it worthy. 

Type of Insurance

Most car insurance companies offer an array of different plans to suit every need out there. Having more elaborate needs will definitely cost you more and place you on a higher-rate plan. However, you should keep in mind that it’s not all about the technical aspects of insurance, customer service should be included in your list of ‘needs’. While it’s nice to have sound system coverage and towing services, you need to demand a supportive customer service that can offer you the right and prompt help where you need it. Even if you will end up being charged extra for impeccable customer service, don’t think twice about it. 

Your Driving History

It goes without saying that if your driving history portrays you as a reckless driver who gets into one accident a month, you will have to incur higher insurance costs. This is a very valid factor as it gives insurance companies information about your driving habits. Not only does reckless driving put yours and others’ lives in danger, but it will also cost you a lot in insurance money. 

Don’t underestimate the importance of finding the right insurance provider. You can use the above information to be prepared when shopping for a decent coverage plan and know what to expect. Instead of rushing into the first plan you come across, take your time, and ask around for good deals. Once you set your priorities, you will be able to find a plan that you are happy with and can rely on.

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