Car insurance premiums can vary based on several factors. Many consumers are aware of some of those components, but it is useful to understand the main factors affecting your auto insurance rates. Being informed and aware of these factors can help you avoid factors that could increase your auto premiums and help qualify you for the best rates. There are four main factors that almost every car insurance policy uses to base their premiums.
Read on to learn what they are and what you can do to keep your insurance costs as low as possible.
1. TYPE OF VEHICLE
Some insurance companies will charge higher insurance rates for cars based on specific classes. These include intermediate-performance, high-performance and sports vehicles, including those with rear engines. Vehicles modified in any way may affect insurance premiums as well. Lastly, how safe a car is to drive or how the likelihood of theft are common factors affecting automobile insurance rating. Cars that have an excellent safety rating will likely result in lower car insurance premiums.
2. DRIVER’S PERSONAL CHARACTERISTICS
A person’s demographics, including their age, sex, marital status, and geographical location, can all affect car insurance premiums. Insurance companies often look at age, because studies have found that drivers under the age of 25 make up approximately 15% of the total driving population, however, are involved in about 30% of all vehicle accidents. Male drivers also seem to be involved in a much more significant percentage of fatal auto accidents, especially males 25 and under. Individuals that reside in a geographical area with higher rates of vehicle theft or accidents can also expect higher insurance premiums. The geographical rate differences can exist between cities and even postal codes.
3. USE OF THE VEHICLE
All vehicles require automobile insurance; however, not all cars are used in the same manner or for the same reasons.
Vehicles used for business or commercial purposes will likely require you to purchase business use on your personal auto insurance policy or purchase a separate commercial automobile insurance policy. While the business and commercial premiums are different from typical private car insurance premiums used for regular commuting, you may find they don’t differ substantially from standard individual auto insurance rates. It is essential to get professional advice on if you require business or commercial coverage as they are very different. Learn more about Isure’s Business Car Insurance Services.
If your car is at home and not driven often, you may also qualify for lower car insurance rates. Some auto insurance companies offer telematics solutions that can result in significant premium savings.
Regardless it is essential you accurately declare your vehicle’s use on your policy to ensure you have the proper rating. Also, as your vehicle use changes, make sure to update your policy. Having an annual policy review with your insurance broker is a great way to ensure your car insurance policy is up to date.
4. DRIVING RECORD
All driving records, traffic infractions, and accidents of insured drivers, and even those that live with them will affect car insurance premium rates. The more severe violations the insured driver has, such as a DUI, leaving the scene of an accident or an assault from the vehicle, will result in much higher insurance premiums. Your driving records inform insurance companies of how reliable or risky the driver is.
isure Insurance provides clients with the best access to affordable auto insurance rates across Ontario. As Ontario’s leading independent insurance brokerage, we offer you high-quality service and fast results you can count on. We can find you the absolute best auto insurance rate and coverage in the shortest amount of time. Get started with us with an online quote by visiting Auto Insurance.
