Auto Insurance Rates
What is factored into online insurance rates?
So just how are auto insurance rates online calculated? In general terms most companies will try and spread costs as fairly as they can - this is achieved by a series of grouping. People are grouped because it has been proved that drivers with related risk characteristics will more than likely experience a predictable quantity of loss in a period predetermined by a policy. These predications are determined using records and statistics to gauge for example the frequency and cost of auto accidents.
The procedure to determine the auto insurance rate online is unique to every company, but the factors that are taken into consideration are usually the same. Only a few can be shifted and manipulated to help you gain a cheaper rate, but it is still useful to have an understanding of what is ultimately going to have an effect on your insurance premium.
Auto Insurance Rates: Online Determinants of Low Rates
Age: Statistically drivers who are younger than 25 years of age tend to have more car accidents. It is not unheard of for a 17 year old to pay up to three times as much than a thirty year old (all other factors held constant.) Those who are between 50 and 65 years old have experiences behind them and statistically have fewer accidents. This group is therefore offered discounts on auto insurance rates
From 65 years of age and older the rates start rising again. As expected this is due to factors such as deteriorating vision and delayed reaction time. It is advised that people approaching 65 remain with their current policy as it is a fact that people of this age often find difficulty in finding an insurer to take them on.
Gender: This is not a case of gender discrimination but of pure statistical fact: men have more accidents than women, and in reference to fatal accidents men are three times more likely to be involved in one. From this you can expect auto insurance rates online for young men to be higher than that for young women.
Marital status: It has been proved that as a group married couples have fewer accidents than the young care free and single. So for once being married is going to save you some money!
Driving record: This is a huge factor used to determine premiums. Usually an "at-fault" accident or a conviction will count against you for up to three years. Obviously an accident where you were primarily responsible will weigh a lot more against you than a simple traffic violation such as speeding. Companies though are very rigid when it comes to those found guilty of driving under the influence - and often they are point blank refused.
For those who have been convicted and are struggling to take out a policy there is an option they can turn to - "assigned risk pools" otherwise known as "state-regulated insurance plans." Those that have to resort to this option cannot choose a company; instead the state will assign the "risk" to an insurer. The coverage, however, might be sufficiently less than that required for complete liability protection.
Companies are also very wary of those who have not owned a car in 3 years, as this indirectly implies that you have not been driving for a similar period. This could sufficiently bump up auto insurance rates.
Type of car: It's not only people that are grouped - vehicles are to. Statistical information shows that certain models and makes are prone to be involved in more accidents, are more costly to repair, and are more targeted for theft. Therefore choose wisely as falling short in these areas can maybe double collision and comprehensive insurance.
Other factors affecting Online Car Insurance Rates:
Mileage is often taken into account. A higher mileage suggests you use your car often, which increases the risk of you being involved in as accident. Different states will have different rates, and in relation to this people who live in small towns are less likely to experience a serious collision than someone who lives in the city (vehicle repair, medical care and legal services are also cheaper in a small town.)
Credit ratings can also be factored in. A good credit rating could reduce your premiums