A variable expense that exists in virtually every budget is a family’s monthly automobile insurance premium. However, do you know how that rate is calculated, or what is required to drop it? Every day you don’t know the basics of how your premium is calculated is a day you are probably paying more than you need to for your car insurance.
How Rates are Calculated
Your insurance premium is a complex calculation made up of a variety of common insurance risk factors including age, gender, driving record, experience, credit score and even the safety rating of your car.
Do you know how safe your car is? You should. Your insurance company certainly does. Every car that has ever come off a manufacturing line is tested and rated for safety, and that rating makes a significant difference in the cost of your monthly premiums. Therefore, if you want to save some serious money on your insurance premiums, know your safety ratings.
How Safety Ratings are Determined
The authorities in the vehicle safety industry are the folks at the Highway Safety (IIHS). It is their job to assess a vehicle’s ability to avoid accidents and to maintain itself in the event of a crash. The IIHS performs all crash tests on cars, vans, SUVs and trucks, using rigorous methods. They test the vehicles for side impact and rollover crashes, and upon conclusion, each vehicle is rated as poor, marginal, acceptable, or good. Vehicles earning the higher crash test rating are considered less risky and assigned lower insurance rates.
What the IIHS Looks For
When the IIHS rates vehicles, their process is nothing short of comprehensive. Vehicles earning the highest safety ratings test highly in these areas:
40 mph frontal offset crash tests that assess structural design.
Side crash tests to assess a traveler’s protection when struck in the side.
Rollover ratings to assess a vehicle’s roof strength in the event of a rollover.
Rear crash protection and head restraint ratings to test the efficiency of seat/head restraint combinations against whiplash injury.
Electronic Stability Control tests to measure to what degree a driver can maintain control of the vehicle when it spins out.
Car Safety Features
Of course, not all cars are created equal. Different vehicles and manufacturers offer different safety features, based on their company history and marketing demographics. Before deciding on your next vehicle, check out its safety ratings both with IIHS and with the Vehicle Safety Standards (FMVSS). If you own a car with advanced safety features, you have already taken the first step to lowering your monthly premiums for good, without sacrificing your coverage to do it.