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How The Cost Of Your Car Insurance Is Calculated

The cost of car insurance will often vary between insurance companies. Each insurance provider uses its own formula, but they often consider the same general factors in determining the price of your insurance. Learning about these factors in calculating the cost of your auto insurance is key to helping you save money. Working with an insurance agency is also important in making it easier for you to find the best insurance provider to meet your needs.

Here is an overview of the different factors impacting the cost of car insurance.

Your Age and Gender
Age can often play a big role in impacting the cost of your auto insurance. For example, many younger drivers are at a much higher risk of an accident due to their lack of experience, which is why it’s more costly to insure someone in their teens or early twenties. Women also usually pay lower insurance premiums because the data shows that they are in fewer car accidents. The best way to eventually lower the cost of car insurance is to practice safe driving habits and avoid getting any traffic tickets to help you eventually lower the cost of insurance.

Type of Vehicle
Another major factor impacting the price of car insurance is the type of vehicle. Trying to insure a sports car is a lot more expensive compared to a more basic vehicle. The cost of auto insurance is also dependent on the value of your vehicle, as a more expensive car is always more costly to insure compared to cheaper models. Safety features on your vehicle can often help lower the overall costs of your car insurance. Keeping all of these things in mind is important if you are ever shopping for a new vehicle.

Driving History
The cost of auto insurance is also impacted by your past driving history. An insurance provider will examine your driving record before determining your rates. Any past violations will have a negative impact on your insurance, whether it’s speeding tickets, reckless driving, DUI, or other incidents. Recent offenses will always have a greater effect on the total cost of your auto insurance. Being involved in any accidents can also result in higher premiums. Practicing safe driving habits is critical to avoiding accidents while helping you to lower your insurance costs.

Vehicle Usage
How often you drive your vehicle is another factor that insurance companies consider before offering you auto insurance. Drivers that log extensive miles are much more likely to be involved in an auto accident compared to other drivers that don’t use their vehicles as often. It’s possible that you can qualify for a lower insurance rate if you work from home and you don’t have to commute on a daily basis. Each insurance provider uses its own standard for determining a “low-mileage” driver, as an insurance agency can help you choose the best plan for your situation.

Your Location
The price for auto insurance can vary based on your location. Typically, drivers living in urban areas are more likely to pay higher premiums due to the greater chance of an accident or theft because of the much larger population. On the other hand, paying for car insurance while living in a rural area is usually less costly for most drivers. Each insurance provider uses its own factors to consider the risk of your location, which is why it’s important to work with an agency to compare all of the different quotes to find the best price.

Credit History
Insurance carriers will look at your credit history before calculating your rates. For example, a poor credit history will cause you to pay more for your car insurance due to the greater chance of you filing an insurance claim. Some insurance providers use a credit-based insurance score to determine the likelihood of you filing a claim in the future. Staying proactive by paying all of your bills on time can help you raise your credit score and eventually lower your car insurance rates.

Your Insurance Company
Every insurance company uses its own formula to calculate the cost of auto insurance. Insurance providers also offer various discounts. Getting multiple quotes from all of the major insurers is essential in finding the best coverage at the right price. An insurance agency can quickly compare quotes from all of the major insurance providers, which saves you a lot of time and hard work. Discussing your needs with an agency will help you find the best auto insurance available that fits your budget.

Cost of Your Deductible
One way to lower the cost of auto insurance is to raise your deductible. A higher deductible will lower your monthly payments, but it will cost you more money if you ever need to file a claim. The average cost of a deductible for car insurance is $500, but you can raise it to $1,000 or higher. However, a higher deductible isn’t worth the risk if you don’t have the extra money to pay it. Making sure you have more than enough money to cover a deductible is always essential before raising it to a higher price.

Security and Safety Features
Built-in security features to deter thieves from breaking into your vehicle can lower the cost of your auto insurance. Many modern cars are also equipped with advanced safety features to help prevent accidents, such as blind-spot detection, adaptive cruise control, rearview camera, and lane departure warnings. Vehicle manufacturers are continuing to develop new technology to improve safety. These safety features can play a key role in keeping you safe while driving, and they can also help lower the cost of your insurance.

Insurance Add-Ons
Choosing add-ons for your car insurance policy can be beneficial, but it will cost you more money. You can choose from numerous add-ons, such as collision, bodily injury liability, underinsured motorist coverage, or MedPay, to help cover additional medical bills. Weighing all of your choices is always a good idea before making any decisions about your insurance. Discussing your situation with an insurance agency is also helpful in determining if you should consider any of these add-ons for your auto insurance policy.

Potential Discounts
An easy way to save money on your auto insurance is to check out all of the available discounts. Insurance providers often provide a wide range of discounts that can result in big savings. You can usually get a discount if you bundle your coverage together, whether it’s insuring multiple vehicles or even getting home insurance from the same company. Other potential discounts are also available, whether it’s discounts for seniors, AAA members, or students that maintain a 3.0 grade point average or higher. An insurance agency will make sure you don’t miss out on any discounts.

Why You Should Use an Insurance Agency to Find the Best Rates
Finding the right insurance coverage for your vehicle is often time-consuming, and it’s easy to feel overwhelmed with all of the available choices. Choosing to use an insurance agency is one of the best ways to simplify this entire process. An agency will work on your behalf to compare quotes from all of the major insurance providers. These insurance professionals can help you choose the best coverage available while also making sure you take advantage of any discounts to save you money.

Contact Wellcovered Insurance for Car Insurance Quotes
Wellcovered Insurance is an agency that partners with more than 30 insurance carriers across the nation. Our primary goal is to make it easy for our clients to find the best car insurance coverage available. We also offer many other types of insurance, whether you need home, condo, rental property, RV, motorcycle, commercial auto, professional liability, or other options.

We are also one of the highest-rated insurance agencies based in Florida, as you can receive an auto quote in only 15 minutes, and a home insurance quote takes just one or two business days. You can also visit our office in Orange City if you ever have questions or need to modify your insurance coverage.

Reach out to Wellcovered Insurance today if you are in need of car insurance!