Factors that determine car insurance bill
A performance car, like this Subaru WRX, can contribute to high insurance rates, especially for young drivers. (March 31, 2010) Credit: Jose Moreno
Calculating an insurance bill involves many factors and knowing what they are could help you avoid costly rates. Your age, driving record, where you live and the car that you drive are the biggest factors that determine your premium. Insurance companies predict the likelihood of you having an accident based on statistics they've collected over many years.
If your premiums seem high, the insurance company probably considers you to be someone more likely to be in an accident. It's crucial to shop around, as different insurance companies' premiums can vary widely.
Price quotes will vary: It's easy to say you want everything covered, but if you've been in an accident or two, or collected some speeding tickets, complete coverage may be expensive. Premiums will vary based on driving history and age, so don't be upset if your rate differs from someone you know.
Look for discounts: You can save money if you have a clean record, have no recent accidents, get good grades, buy a new car or serve in the military. These deals vary by provider so it will likely require extra research on your part. Don't worry; it could pay for itself.
Don't be shy: It's OK to ask the insurance representative a lot of questions. Some insurance agencies will cover custom repair parts and reimburse you for your rental car, roadside assistance and even injuries to your pet. Make sure you ask if these are available.
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Characteristics that help lower insurance rates, include new or used vehicle, daytime running lights, anti-theft system, antilock brakes, motorized seat belts, driver characteristics, good student (meets grade-point average set by the provider), college student who doesn't bring the car to school, being married, being over 25, living in a less-populated area, 55 years old and retired, 65 years old or older and drives only one-quarter of the vehicle's mileage, owning a vehicle used only on a farm
The vehicle characteristics include, vehicle characteristics, performance model, commonly stolen cars, poor crash-test scores from the Insurance Institute for Highway Safety or the National Highway Traffic Safety Administration.
The driver characteristics include young age (16- to 19-year-old drivers are considered the highest risk), multiple tickets or traffic violations, multiple accidents, living and working in a city, many hours of driving per day.
