How are your Car Insurance Rates Calculated?

Article Written By: bethanycollins

The average American makes car insurance payments his/her entire adult life and most people are not happy with their rates. Since it is a consistent and unavoidable expense, it is best to understand what determines the rates and use that knowledge to get the best coverage you can. There are many different factors that come into play when determining car insurance rates.

According to a study conducted by the Center for Disease Control and Prevention in 2009, approximately 8 drivers between the ages of 16 and 19 die every single day due to an automobile crash and drivers between the ages of 16 and 19 are at least 4 times more likely to cause a car crash than drivers from any other age group. Since young drivers tend to be unsafe, their rates tend to be very high, which is unfortunate since many of them can't afford to pay so much, given the pressures of minimum wage jobs and /or their academics.

They can however, ask the company if they are eligible for any discounts; many companies offer discounts to students who complete a defensive driver's course or excel academically. Once over the age of 25, most drivers are able to find more affordable car insurance quotes.

Your driving record plays a huge part. It is an indication of how likely you are to make claims and have claims made against you. Even something as minor as a few speeding tickets can send it through the roof. The defensive driver's course mentioned above helps you keep your driving record clean, which in turn helps you find reasonable car insurance quotes and keeps your car insurance rates low year after year.

Depending on the population, the climate, the average accidents per year, legislation and many other factors, each state has different car insurance rates. For example if you live in Texas, you are required to have liability coverage for bodily injury of at least the $30,000 for one person and $60,000 for all persons.

On the other hand Arizona requires you to purchase liability coverage of $15,000 for bodily injuries sustained by one person, $30,000 per accident for all the people injured and $10,000 in property damage coverage. An important thing to keep in mind is that the minimum coverage required by your state may not be sufficient in the event of an accident.

A high frequency of natural disasters, crime, and vandalism within close range of your zip-code all suggest that there is a greater probability of you filing claims, hence it is in the best interest of your insurance provider to charge you higher car insurance rates than they would someone who lives in a sleepy retirement community. So keep car insurance rates in mind when you go house hunting. Your marital status, income levels and credit history provide an insight into your economic stability, giving your prospective company an idea about your ability to pay off deductibles and make premium payments in time, hence also affecting your car insurance rates.

Finally, car insurance rates vary from provider to provider. The car insurance quotes you receive from one company may be higher than those offered by another. Similarly, one company may choose to raise you premiums after your first accident, while another company may have a policy to overlook the first accident. Do your research before making a decision.

The unkown company offering the cheapest car insurance rates may cost you a fortune in the long run. Do not settle for anything less than a reputed, reliable company that will come through for you when you need it to.

About the Author

Bethany Collins - car insurance

You Can Link Directly to "How are your Car Insurance Rates Calculated?" by using the url:
http://www.allbestarticles.com//finance/auto-insurance/how-are-your-car-insurance-rates-calculated.html

This Article Has Been Published on Wed, 18 May 2011 and Read 203 Times

Find All Best Articles at http://www.allbestarticles.com

Rating: Not yet rated

Comments

No comments posted.

Add Comment

You do not have permission to comment. If you log in, you may be able to comment.

Related information on Auto Insurance

Calculating your Car Insurance Estimate
Helping Novice Drivers
Prepare yourself for collision and car insurance claims
10 Car Insurance Dilemmas
Low Car Insurance Australia Premium Cars As Important As High Mileage Cars
Ten Auto Insurance Myths Debunked
Car insurance for your Teen Driver
How to rate Auto Insurance Companies
How are your Car Insurance Rates Calculated?
Options For Classic Car Insurance?
Get cheap car insurance to prevent massive car repair expenses
Go for auto insurance cover for safety reasons
Can Your Facebook Account Affect Your Car Insurance Rates?
Should Men Pay More For Insurance Than Women?
Reliable guide to get cheap car insurance
Easy way to buy cheap auto insurance
Cheap auto insurance: No more worry about repair expenses
Effective ways to reduce your auto insurance bill
Benefits in Australia of using companies that only offer Online Car Insurance Quotes
Car Insurance myths
Getting Auto Insurance For Brand New Cars
Ontario Car Insurance Rates
The Major Factors When It Comes To Auto Insurance For Seniors
Discovering The Significance Of Having Auto Insurance
Senior Auto Insurance-how to find low rates