Various factors influence in buying a car insurance premium. Premiums and policies would differ from company to company. Therefore, it is important to analyze the policies carefully before confirming it. There are various factors the insurance companies consider while providing the insurance policy. Every single insurance company in the world would consider these factors mentioned below. Therefore, it is wise for the applicants to know the factors considered and influenced in talking an insurance policy.
Drivers Age: All the insurance providers consider the age of the driver seriously in determining the premium. Since the accidents among young drivers are on the rise, insurance companies charge high premiums for them. At the same time, old drivers are considered to be more responsible and their premium are considerably less when compare to the young drivers.
Car Type: The type of the car is the second factor considered by the insurance company. In simple words, in case the policyholder’s car is expensive, the premium would also be high and in case the car is inexpensive, the premium would remain less.
Marital status and Gender: Most of the insurance companies offer various discounts to women drivers. This clearly shows that women drivers pay lesser premiums compared to male drivers. They also receive lower premiums irrespective to their marital status.
Driving Record: This is the most influenced and considered factor while providing insurance policy to a person. If the driver has experienced accidents earlier, he would more likely get high premiums. It is the same with new license holders.
Personal Information: Some states and companies use various ratings to evaluate your risk and reward factor. Most of the companies such as Liberty mutual, State Farm or Allstate provide policies for many reasons, which are evaluated using the applicant’s personal information such as marital status, home ownership, education qualification etc.
Geographical Factor: If the policyholders live in an accident prone area, he or she will have to pay high premium. Similarly, if a person lives in a high traffic area, the premium would be high due to the high possibilities for accidents.
Occupation: This might sound strange on who occupation influence car insurance premium. The life of a classroom teacher and a journalist is not the same. The risks involved in the journalist’s occupation are high for which he or she will have to pay high premiums on car insurance. This is how occupation influences the premium.
These are the main factors that influence the car insurance premium, which most people are not aware. Therefore, it is important to know these factors since everyone will have to take up a car insurance policy at some time in life. These factors lead or will make the applicant to be more careful while driving especially if he needs to take a car insurance policy. The risk factor plays very important role in determining the car insurance premium. Therefore, drive carefully and follow traffic rules always, which will naturally reduce the probability of meeting an accident on the road.