Car Insurance Rates

Every state requires each driver to be financially responsible for damages that results from an accident. To help alleviate the financial responsibility, insurance companies aim to provide their customers with adequate and affordable coverage. While determining car insurance rates, the insurance company considers factors such as the type of insurance coverage, the driver’s age, driving history, vehicle type and vehicle’s purpose.

Depending on the state, at a minimum the insurance policy covers body injury liability, property damage liability, uninsured/under insured motorist coverage, medical payments, personal injury protection, collision and comprehensive. Under insured motorist coverage kicks in when a motorist has an accident but their policy is not enough to cover all medical bills. Each state sets the lowest amount of coverage each person is required to purchase. Insurance companies provide their customers with the option to purchase a higher coverage amount resulting in a higher insurance premium. In certain states, collision and comprehensive and personal injury protection are optional.

Insurance policies with lower deductibles cost more than policies with low deductibles. Policies with optional coverage such as rental car reimbursement, gap coverage and road side assistance pay higher car insurance rates. Gap coverage pays the difference between the car’s value and the amount left on your car loan if the car is totaled.

Statistically, drivers over 25 are consider most likely to be an accident. As a result they generally have the highest insurance rates. As the driver ages, the rates decrease but other factors such as accident claims, a poor credit rating and other driving violations like a DUI, speeding tickets and reckless driving can cause the rate to increase. If there are other drivers in the home, that will affect the cost your policy. It costs more to insure a new driver or a teenager than it does to cover a more experienced driver.

An individual’s stability and occupation also influences the car insurance rates. For example, because a person who has a job that requires

frequent driving has a higher chance of getting in an accident, their insurance rate will be higher than a person with a desk job. The company also considers other factors such as marital status and gender. Rates for a married person are much cheaper than the rate of a single person the same age.

The age, type and how the car will be used are factored into the car insurance rates.

New cars cost more to insure because they are at a greater risk to be stolen and they cost more to repair or replace in case of an accident. Foreign cars cost more to insure than domestic cars made in the same year. Depending on the usage, the amount of miles you put on your car every year affects your insurance premium.

To further save money, insurance companies offers extra savings based on other factors such as multi-car discounts, higher-education discounts and discounts for having theft protection devices. Discounts are also given to those who had insurance for at least 30 days prior to issuing a new car insurance policy.

 

Car Insurance Rates