In today’s economy, while average family is looking for ways to save money, the average motor vehicle insurance cost has risen to over $1,100 for a single driver policy.
Many of us write a check to our insurance company, without thinking twice about how their premium is calculated, or why their insurance is so high. The truth is that all insurance companies consider several risk factors when determining your premium. Your insurance company will consider some of the following factors:
- Age: Young drivers under 25 will typically pay higher rates. As a general rule, teenage males will pay the highest insurance rates. However, many insurance companies will consider your teenage driver’s grades and will provide a “good student discount”.
- Gender: Female drivers are considered to be safer drivers by the insurance companies and will typically offer female drivers lower rates.
- Driving record: While some insurance companies have a “one accident forgiveness policy”, each insurance company varies on how an accident or moving violation will affect your rates. Your driving record may be the most important factor in determining your insurance rates. Even one collision or moving violation can increase your insurance premiums by up to 30%.
- Marital status: Married couples typically pay lower rates.
- Home ownership: Home owners will typically pay lower rates.
- Location of residence: The insurance companies will consider the area you live as a factor when determining how high your rates will be.
- Anticipated annual mileage
- Credit history
The biggest factor in determining your premium is the amount of coverage. Like any other good or service, you get what you pay for. Your insurance premium will largely depend on the amount of coverage you choose to purchase.
There are many ways to lower your insurance costs. One trick to save some money on your premium is to bundle your different policies. Most automobile insurance carriers also offer homeowners and renters insurance policies as well. Often times, you will get a discount if you get all your policies through the same insurance company.
Because every insurance company assesses determines premiums in a different way, the attorneys at Dross Berman LLC believe that it is important to seek price quotes from at least three different insurance companies before choosing your policy. Make sure to ask the agent as many questions as necessary to understand everything your policy will cover, and what will happen to your premium if you are involved in an accident or receive a moving violation.