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Car Insurance – 7 Factors That Affect the Premium Cost

Before you even look for a car insurance provider, you should educate yourself on what factors determine the amount of the premium of this type of insurance policy. This intelligence will ensure that you make an informed decision and get the best out of your cheap auto insurance.


Each insurance provider follows its own system, but it is important that you know the one most important factor when the premium for your car insurance is calculated, i.e. claim frequency. This factor does not refer to you as a person, but you as part of a category of persons. For example, women, teenagers, senior persons, alcohol addicts, and so on.


Persons who belong to the higher risk groups will be charged more, even though you as a person do not exhibit most characteristics of the group. For example, you are a senior person but always drive carefully and have no history of negligent or rash driving. Still, you will be considered in the high risk category when you ask for a quote for car insurance policy owing to the characteristics of “senior persons” as a group.


What Goes Into Calculating the Car Insurance Premium?


There are many other factors that will influence the amount of the premium such as:


  1.  Personal Style – the insurance provider will work out the premium after taking into consideration your age, gender, prior insurance coverage, frequency of using your vehicle, routes where you drive, driving habits, lifestyle habits, area where you live and so on. The agent will be looking for factors that increase risk of accidents; the higher the risks, the higher the premium cost.


  1. Discount Eligibility – there are many factors that will help you get substantial discounts when you buy car insurance. It is up to you to convince the agent that you are a lesser risk to their company.  Factors such as installation of quality anti-theft devices, completion of driver education course, owning and insuring multiple vehicles, low mileage, multiple policies with one provider, good driving history and so on.


  1. Optional Coverage – there are three types of coverage any cheap auto insurance offers, i.e. basic coverage – and two optional choices – collision coverage and comprehensive coverage. Take time to understand what each one involves and buy only that coverage, which is tailored for your needs. Optional coverage such as rental reimbursement, medical payments, labor and towing coverage etc may not be required. If you feel you need a wider coverage, you may consider the comprehensive car insurance, which is less expensive than the collision insurance.


Or speak directly with an agent at Insurance Medics, call now at 1 (866) 396-9140. Our customer enrollment center is open Monday through Friday from 9:00AM to 6:00PM EST and Saturday from 10:00AM to 2:00PM. We look forward to answer all your questions and having you as a customer.