Factors that Influence Car Insurance Premium
The premiums that are paid for a car insurance policy can cause a huge dent in your pocket. But the need for purchasing a car insurance policy is a must. So, the best way to avoid any kind of unwanted situation is by being aware of some of the factors that influence car insurance premiums.
Below are some common factors that can help you to determine your car insurance premium.
This is one of the most important factors for your car insurance premium. The geographical location of where you live is important because the statistics are collected by the insurers which shows that they affect the probability of accidents or any other incidents.
- The vehicle you drive:
It is not just about you, but also the car that you drive influences your premium. Normally, more costly vehicles will draw in a higher premium as they are more costly to fix if any mishap occurs and cost more to replace when stolen. Nonetheless, those vehicles which are stolen easily present more risk of theft, and as a result, it will attract more premiums.
- Driving experience:
As mentioned previously, age also determines a premium. Young drivers specifically believe that is unfair. But according to the statistical evidence, young drivers are at a higher risk. These drivers are bound to have an accident because of a lack of experience on roads. Higher the risk, the higher is the price of the premium needed to cover the risk. However old drivers are less likely to cause accidents, so low is the price of the premium.
Most importantly, premiums may increase over time because, in case of a mishap, the expense to repair the car increases no matter what the age of the vehicle is. It does not cost any less if you replace the guard on a one-year-old car than it does on a brand-new car which is equivalent. The cost of labor, parts, and paints will increase over time regardless of the age of the vehicle and a huge cost from the damage caused by accident, the marked down the value of the car has a little bearing on the cost of the premium.
- Safety efforts:
By installing a car alarm to protect your car is a great idea for reducing the premium price. But the cars which do not have these alarms installed, for them the premium price depends on the type and location of the car.
You should look after your car, in the eyes of your insurer, which depends on where and how it is parked, especially during the night. Different areas are subject to different risks, which are calculated depending on the number of thefts occurred, and different crime incidences such as hijackings and crash. If your car is locked in your garage, then it is less likely to target your car than the one parked on the road. That implies the premium for a protected car will be lower than the one which is not undercover.