When insurance companies design a car insurance policy, they take a lot of factors into consideration. These factors are ways to measure the risks of the unique individual. Then those calculations are used to determine the price of the policy. The higher the risk factors, the more expensive a policy will be. Here are five of the key factors that will increase the cost of an automobile insurance policy.
1. Where You Live
There are many different ways where you live can increase your risks. If you live in a high-density populated area that experiences a lot of crime and auto accidents, your likelihood of having to file a claim goes up. As a result, your insurance costs will go up. If you live in a less populous area with low crime and accident rates, your insurance costs will be less.
2. Your Driving Record
If you have a good driving record, free of tickets and auto insurance claims, you are considered less of a risk. That is because people who tend to drive recklessly are more likely to get into accidents. People who get into accidents are also more likely to be in further accidents. In both cases, premiums will go up. Luckily, there are some ways to clean up your driving record to reduce your premium.
3. Type Of Vehicle You Drive
Some vehicle models are safer than others. Depending on which type of vehicle you drive, will impact your insurance premiums. If you drive a vehicle with a high safety rating, your insurance premiums will be less. So when shopping for a vehicle, always keep the safety rating in mind. Further, the more expensive the vehicle, the more expensive the insurance because repairs and replacement cost more.
4. Your Coverage Limits And Deductibles
The higher the limits, the more expensive your insurance premium will be. All states have required coverages, but many people purchase higher limits to ensure that all their costs will be covered. Further, your deductible value impacts the cost of your insurance. The higher your deductible, the more risk you’ve agreed to take on. That reduces the costs for the insurance company and they pass those savings on to you.
5. How Often You Drive
The more you drive, the higher your premiums will be. That is because this increases your risk of an accident in two primary ways. First, the more wear and tear a car experiences, the higher the likelihood that it will have a mechanical failure that leads to an accident. Further, the more you drive, the more exposed you are to potentially get into an accident because you are on the road more often. Driving less will reduce the chances of an accident.
Although all of these factors can lead to higher premiums, there are ways to bolster these costs. Panorama can help. We work with a variety of insurance carriers and can find a policy that works specifically for your needs. We’ll compare rates, limits, and deductibles to get you the most coverage for the less amount of money. Give us a call today to get started!