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The Cost of Car Insurance

Calculating the cost of car insurance

The cost of car insurance might seem random, given the vast differences in quotes offered by various insurers. However, insurance companies are very calculated in the price they charge you for coverage. Since it is always personalized according to risk variables that are unique to you, it pays to understand which factors could be affecting the price you pay for coverage and what you can do about them.

Driving History

There are many factors in your personal vehicle history that can affect the cost of car insurance. If you have any accidents and traffic tickets on your driving record, your insurance company will probably associate those incidents with your future driving behavior. Compared to someone with no traffic violations or accidents, you could appear higher risk, which could result in higher premiums.

Past Insurance Claims

This is what it all comes down to for your insurance company – claims. For insurers, it is often not the size of the claim that matters so much as it is the type of claim and the number of claims you make in a 5-7 year period. Having multiple claims – even small claims or denied claims – could be a red flag to insurers that you are at high risk of filing future claims against your policy. Eventually, old insurance claims will no longer count against you. In the meantime, be sure to only file claims for liability and major damages to your vehicle that outweigh the combined cost of your deductible and higher rates.

Driving Activity

Insurance companies want to know what you do behind the wheel. Some are concerned with the use of your vehicle and the number of miles you drive per year. For example, a person who works from home and only drives for personal reasons may pay less for car insurance than someone who drives primarily for work or has a lengthy daily commute.

Your Car

What type of car do you drive? Did you know it could be affecting your premiums? Everything about your car, from its safety features to its age, can impact the price you will pay for car insurance. Insurers want to know details, such as:

  • How much will it cost to repair your car in your area?
  • How much will it cost to replace your vehicle?
  • What make and model do you drive? (Certain models are high targets for theft)
  • How old is your vehicle?
  • What is your vehicle’s safety rating?
  • What safety features does your vehicle contain? (i.e. airbags, anti-theft alarm)
  • Where do you park your vehicle at home? (i.e. garage, street, parking lot)

Your Personal Life

Insurance can get very personal, especially when it comes to assessing your risk. You could pay higher or lower insurance premiums from some carriers based on your age, gender, and even your marital status. You could also be penalized or rewarded based on information in your credit report. Negative marks on your credit could be an indication of irresponsible behaviors, whereas a person with good or great credit could appear more responsible.

Shop with an Independent Agent

One of the most important steps you can take is shopping for coverage with an independent agent here at Noah Insurance. As an independent agency, we work for our customers – not the insurers. That allows us the luxury of shopping around for competitive rates on your behalf until we find a carrier that is most favorable toward your individual risk variables. We can also help you procure money-saving discounts that help further lower the cost of coverage.

For more information or to request your free quotes, contact our office today. We look forward to serving you soon.