For most drivers, understanding how car insurers set prices can be a puzzle. And they’re not to blame considering car insurance companies use different pricing factors to determine your risk. The higher your perceived risk, the more expensive your car insurance rates.
When you decide to compare car insurance rates, you should always remember that not all insurers weigh pricing factors the same. A quote you get at one insurance agency might be significantly cheaper at a different agency for the exact same coverage.
For this reason, understanding the key factors affecting car insurance rates prior to shopping around is essential. Below are some of the most popular ones:
Your Driving Record Matters
Your driving record includes your history of at-fault accidents and traffic violations. It is arguably one of the biggest factors that insurers use to determine your rates. Most car insurers examine your driving history for the past three to five years, depending on where you reside. If you’ve been involved in a car accident before or received traffic tickets, you should expect to pay more for auto insurance.
Regardless of your driving history, there are different things you can do to improve it. Practicing safe driving habits and avoiding transgressions like speeding tickets will eventually pay off. While it might take long, but the more you drive without incidents, the less you’ll pay for car insurance.
Your Coverage Selections
The coverage you choose will always have a significant impact on your car insurance rates. But you shouldn’t focus solely on cheaper prices to the extent you forget all about the coverage types that you actually need.
Some coverage types worth your attention include liability car insurance, uninsured motorist insurance, medical expense coverage, etc. Take it upon yourself to understand the pros and cons of each car insurance coverage type before settling on one.
Understanding the different factors affecting car insurance rates prior to shopping around goes a long way in making sure you enjoy money-saving benefits on your policy. The more information you get, the easier it will be to find an affordable car insurance policy.
