Online Guide To Car Insurance, Insurance Companies and Hydrogen Fuel Cells.

Friday, November 14, 2008

Car Insurance Costs

Car Insurance Costs

Car insurance companies base auto rates on a variety of factors. The premium you pay consists of a “base rate.” The base rate is adjusted based on factors such as your age, sex, marital status, driving pattern, claims history, location, credit history, and the make, model and year of your vehicle. When you shop for car insurance, remember that each company uses these factors differently.

Age: Statistics show drivers under the age of 25 have more accidents than adults between age 25 and 65. As a result, insurers charge young drivers and families with young drivers in the household higher rates. Statistics also show that senior citizens are more likely to be involved in a car accident.

Credit history: Under federal law, car insurance companies can use credit history as one factor that impacts your auto rate. They may assign you an insurance score based on your credit history. They use your score as one factor to decide whether to accept or decline your coverage, or how much to charge you. However, the law limits the use of certain information in credit scoring.

Driving patterns: The number of miles you drive per year can increase your car insurance costs. For example, if you drive a total of 7,000 miles in a year, you will normally pay lower rates than if you drive 15,000 miles in a year. Auto insurance companies consider the distance you commute to work as additional miles you add to your non-commuting, pleasure miles.

Driving record and claims history: Most companies apply a surcharge to drivers involved in an accident or convicted of multiple traffic violations. Likewise, the more claims you file, the more likely your rates will increase.

Gender: Young men under the age of 25 are involved in more accidents per miles driven than any other population group.

Location: A higher number of accidents in a highly populated area will raise both liability and collision premiums. Higher crime rates in urban areas can also raise premiums for comprehensive coverage.

Marital status: Statistically, married couples have fewer car accidents than singles and generally pay lower auto insurance rates.

Vehicle type: Generally, the more expensive your car, the more you will pay for comprehensive and collision coverage. Also, because sports cars and high-performance cars are involved in more accidents, cost more to repair, and are stolen more often, they cost more to insure.

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