People can only gape in shock and fury as their auto insurance premiums increase each year without knowing what to do to stop he increase. There are ways of keeping auto insurance premiums down. You have to know the factors that cause our premiums to increase. Knowing these, we can then manage them to our advantage so that when the time to renew our policies, we'd be in a much better place.
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First: your car. The type of car you own or drive factors heavily in the determination of your premium rate. Usually, but not always, expensive cars fetch higher insurance premiums. Expensive cars usually have expensive parts that's why having them repaired cost more. Labor is more expensive, too, compared to having a regular sedan repaired. Insurance companies tend to smile on safer cars. Even if you own a big safe car, you'd still be given a lower premium rate. If you own and drive a safe car, one with side airbag for example, the chances of you being seriously injured or dying in an accident is effectively lowered.
Your driving history, of course, affects your insurance premium, too. If your driving history has a lot of accidents listed, your premium will go up. Too many accidents listed there, your auto insurance company just might not renew y our policy. Traffic tickets, no matter how minor they may seem, are considered by insurance companies, too. A driver with a lot of tickets in his or her driving history will be more expensive to insure.
We all know that as cars become older, they get cheaper. As a matter of fact, the moment you drive your car out of the dealership, its value has already depreciated. Now, if the replacement value of your car is so low that repairing it costs more, there would be no need to have collision coverage. The premium rate would just be the same as replacing the car with the same make and model.
Then there's the mileage on the car. Insurers will look at the number of miles your car has travelled in a year. If the insurers figure your car doesn't go out on the road that much, it just sits in the garage most of the time, premium rate will be low. A car that stays most of the time in the driveway has a much lower risk of being in a road accident. That is why people who work home will have lower rates than people who go to work everyday.
If you live in a rural area, you will have lower insurance rates than someone who lives in an urban area. This is not just because urban areas have higher road traffic but also because urban areas have high incidence of car thefts compared to rural areas. Transportation cost, including garage parking fees, in urban areas can be so high that some urban dwellers just use public transportation to move about.
Your age is another factor. The younger you are, the more expensive you are to insure. Statistics show that younger drivers tend to figure in accidents more than old er drivers. This has something to do with driving experience. Older drivers have more experience on the road. There is a way to offset this, though. If there are several drivers in the household, having them on the same insurance policy can qualify you for a multiple driver discount.
Though we hope that we never need to file a claim, every motorist needs to have insurance. Save on your auto insurance premiums by understanding the factors that affect it.
By Shay West
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