Auto Insurance Key Factors that can Drive up your Car Insurance Costs

My car seems to occupy a large portion of my budget. Between car payments, car repairs, car registrations and licenses and gasoline, I am constantly looking for ways to pare the expenses. Car insurance is one of the necessary evils that also add to the bills. It seems the government wants you to have it in order to drive your car. I certainly want you to have it if you are going to drive near me! I just don’t want either one of us to pay more than we have to.

One of the surest ways to drive up your insurance premium is to have an accident. I had a small fender-bender earlier this year and my premium went up $200. In this case, it was my fault, but it wouldn’t have mattered. If you file a claim, your premium is going to go up. The only exception to this is if you have been with one company for several years. Some companies do have what they call “accident forgiveness” for the first claim. Too many accidents will not only drive up costs, but may result in cancellations.

People with poor driving records pay the highest premiums. This not only includes a record of accidents but any traffic tickets. Get a couple of speeding tickets or a DUI and watch your premiums rise. The best way to keep insurance costs down is to drive safely and maintain a good driving record.

Another factor on insurance cost is the type of vehicle purchased. A larger, more expensive car will generally result in higher premiums. Add more accessories and the cost could go higher. Sports cars capable of going fast will also cost more for insurance because they are considered higher risk for accidents. Newer cars also make for higher premiums due to potential cost of repairs in the case of accident, theft, etc. If you take out a loan for a car, most financial institutions will require more insurance, such as comprehensive coverage. That replaces the full cost of a car if totaled or stolen. Those people owning older cars seldom take out comprehensive coverage since full replacement cost would probably not equal the amount of premiums paid. The more safety equipment a car has the less you will pay in premiums. Disk brakes, air bags, anti-theft devices are some of the options which will lower premiums. Having and using your seat belt is a must!

A third factor influencing insurance costs is the amount of miles driven. Again this is based on the factor of increased risk for accidents. If you commute a long distance to work or driving is part of your job, you will pay higher premiums. Most insurance companies figure the average driver puts about 12,000 to 15,000 miles on a car each year. If your mileage is significantly higher than that, chances are pretty good your premiums will be higher, too.

The deductible you choose on your policy is the fourth factor to influence premium price. If you take a high deductible, meaning you will pay more out of pocket on any car repairs, then your premiums will be lower. The reverse is true: if you choose a lower deductible, you won’t have to pay as much on repairs, but you will pay higher premiums.

The fifth important thing about insurance is who is driving. If a teenage male is permitted to drive your car, you will pay for it on your premiums. Teenage girls will also drive a premium up, but not as high as the boys. They seem to have a higher percentage of accidents. If all the persons driving the car have had some kind of defensive driving course, premiums may be reduced somewhat.. This includes adults, especially older adults.

Finally, if your car is not a part of a package deal, the premiums will be higher. Generally the more items that are covered under one plan the lower the premiums will be on each item. It is smart to find a company that will insure additional vehicles like multiple cars, a boat, a motorcycle or an RV and will cover your home also.

Remember the basic factor that insurance companies use in figuring premiums is the percentage of risk of loss, damage or injury involved in each individual policy. Anything that indicates an increase in the risk factor will increase the premiums. Once you understand this, you can judge for yourself what you can do avoid paying higher premiums. Remember also to shop around. There is a sometimes a big difference in premium costs among the various companies. Finally, remember to drive safely, not only to keep your premiums lower, but for yourself and your loved ones.