The price of car insurance has many parameters that will affect the premium generated when you do car insurance quotes. Car insurance is like any other product that you buy, in the sense that you get what you pay for.
Reputable companies such as www.americaninsurance.com offer free quotations which enable you to see the price before you buy. The prices will differ from company to company and we will now take a look at some of the aspects that affect a car insurance premium so that you will get a greater insight into what affects your policy premium.
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1. Age
The age of a driver has always traditionally affected car insurance premiums. In essence, the older you are, the cheaper the premiums tend to be. However, once you get to old age as we know it, the premiums will, in fact, increase as the risks related to driving increase.
2. Location
Where your vehicle is kept is an important rating factor when it comes to insurance. If you live in a high-risk area, you will be charged a higher premium for this. By high-risk areas, we are referring to areas which have a high level of crime and a high level of past car insurance claims have been made. The same also applies to the location of the vehicle. For example, if your vehicle is kept in a garage overnight, any risk of theft or damage is reduced, hence your premium will be lower than if you kept the car on a driveway or on the street.
3. Type of Vehicle
The type of vehicle that you drive will also have a rating factor when it comes to the premium of your insurance policy. High-performance vehicles and very expensive vehicles will carry a higher premium as the risk of theft or malicious damage increases and replacement costs of such a vehicle will also be higher.
4. Driving Experience
If you are a new driver you will experience higher premiums than a more experienced driver. Once again this is related to the fact that a new driver is seen as riskier on the road compared to a more experienced driver.
5. Vehicle Usage
Your premium will be determined by how you use your vehicle. It is believed that the more that you drive your vehicle, the more chance you have of having an accident. It is also thought that if you use your car for work purposes and commute at busy rush hour times, you are increasing the risk of an incident.
6. Coverage
To keep premiums really low some insurers reduce the level of cover that they are offering and just offer the state minimum requirements in order to seem competitive. Although you will be legal to drive on the road, please bear in mind that you may not be covered for aspects such as a courtesy car in the event of an accident. It’s clear to see the knock-on effect this could have to your daily life.
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