7 Ways That Car Insurance Rates Are Calculated


Everyone is looking to save money in this economy, so why not reduce the costs of your truck insurance? In a moment, I will show you how your premiums are determined. But first ...

Insurance rate, Einstein and the theory of relativity.

Did you know that it took Sir Isaac Newton nearly two hundred years in 1717 for Albert Einstein, in 1905, to finally come up with his infamous formula E = mc2. Well, what does auto insurance have to do with the theory of relativity? Simply this, you do not have to be an Einstein to understand how your vehicle insurance premiums are calculated.

In fact, there are 11 ways for an insurance company to calculate the amount of your premium. You may not be able to do anything against some of them. In the meantime, you can take advantage of it. When you're done, do not hesitate to call an insurance company to answer your questions.

1- Age: How old is the person driving? Common sense tells us that younger drivers have less real experience than others and that it will cost a little more for the moment. The good news is that it's only for a few years, because when you turn 25, your rates will go down considerably. Drivers under 18 are too young to have their own policies. This means that they will have to be listed in someone else's insurance plan. From the age of 18, they can take out insurance under their own name.

2- Sex: Are they a man or a woman? Unfortunately, drivers will pay more because statistics show that they are involved in more accidents. Sorry for the bad news guys!

3- Then come the vehicle information, including year, make and model: I told you that it was not necessary to be an Einstein. it makes sense that a new car is more expensive to insure than an older model. On the other hand, a more luxurious car will cost more than a cheaper car and a sports car will cost more than a sedan. Believe it or not, foreign cars cost more to insure than national cars! If you want to save as much as possible on insurance, try choosing a 4-cylinder, 4-door or domestic saloon or van. If you want a red hot rod with 2 doors, then be prepared to pay for the privilege of insuring it!

4- Address: Did you know that your home address will affect your rates? Think about it for a moment. If you live in an area where the number of accidents, thefts and claims is statistically higher, your rates will be higher.

5- How many miles do you drive per year? It makes sense that the more you drive, the more likely you are to have an accident. The opposite is also true, you will pay less if you do not drive as often.

6- Deductibles: The higher your deductible, the lower your rates. So, if you choose a $ 250 deductible, be prepared to pay more than if you had chosen a $ 1,000.00 deductible. It's not rocket science, so if you're a good driver and have confidence in your ability to drive safely, go for a franchise as high as you can afford.

7- Driving Record: As previously stated, teen drivers will pay more for coverage because they have less experience on the road. However, there are other factors that will increase your rates. Tickets lately? Believe it or not, the parents' driving record will also affect premiums. If parents have tickets or accidents, the costs will be higher than if they had a history of clean driving.

Remember that your driving habits are one of the main contributors to the cost of your monthly premiums. Get in the habit of being a safe and defensive driver.

In conclusion, shop for the lowest rates. Each insurance company will have its own auto insurance rate schedule. It is therefore logical to be a wise consumer and check his prices. Just remember to compare apples to apples.

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