There are many factors that affect the amount of car insurance premium, the insured declared value and depreciation cost decide the assured cover cost by the company for your car, and for the company whatever premium is decided the insured has to pay. Premiums can be monthly, by semester, annually or quarterly, but as a car cost and life is not as much as life longing and the cost. So the premium frequency is expected to be monthly or quarterly. There are some factors that can be listed which affect the car insurance premium.
The very first thing that affects the premium is of course the coverage that the customer has taken up and decided deductibles. Larger the coverage required, more is the premium amount. The thing to remember is, often one doesn’t need all the coverage provided by the insurance company, and many of the coverage are not required by the laws of the states. Deductible if higher means lower monthly payment, and lower deductible is a higher monthly payment.
The vehicle type is also an important factor which decides what will be your premium amount, so what you drive eventually affects the premium; insurance providers do look for the safer vehicles and give some discounts on the cars which are rated as safe in vehicle safety rating, of course then some car insurers charge higher premiums for the car with more chances of damage. So it is advisable to the customer to make some research before going down to buy a vehicle, how much is the safety rating for your car.
Frequency of driving is again an important factor which can affect your premium, in the insurance contract, you have to propose the purpose of your purchase of the car, and by that the insurance company decided the intended use and the frequency of your car, how often, how far in a one go you drive your vehicle.
The place of home or where do you live also adds to the causes which effect the premium. Many insurance companies have divided the geographical area with zones and in those zones separate rules follow for safety and other things. Hence one should note that urban area drivers have to pay more than those living in a rural area.
The driving history of the customer, obviously the drivers with bad driving records any charges on them for breaking traffic rules and other similar kind, for the drivers with long time record of no accident and if you maintain your good driving habits, you will have to pay lesser premiums than your peers. Also even if you have an accident on your record and then in due course of time you don’t get into one, the effect of past accident will be lessened on your premiums.
The credit history and Age, sex, marital status are also the factors affecting the premium, certain credit information and your age might be important as it is seen that accident rates are higher for people under the age 25 and single males. So while deciding the insurance premium above factors would affect only if these are state approved.