Image : http://www.flickr.com
Every insurance company has some magic formula that calculates a whole lot of information and spits out your insurance premium rate based on the risk factors associated with insuring you. This process is known as underwriting, and thanks to the wonder of modern computers it can often be determined just seconds after your information is plugged in. But also thanks to the wonder of modern computers, a lot more information is taken into account now than in the past when that rate is decided upon. While most of us will never have the brain power or desire to figure out this complex process, there are a few basics you can assume will go into an insurance company determining your premium rates.
1. The make and model of your vehicle- generally the first question you will be asked is what exactly it is you drive. Computers keep track of the number of accidents and citations owners of certain vehicles receive, and take this into account when insuring your car. It's safe to assume that driving a shiny new sports car you will be more likely to get a speeding ticket than if your driving your Grandmother's hand-me-down.
2. Your driving record- your past history behind the wheel of a car is a huge factor in determining your insurance rates. Past accidents, tickets, and DUI charges will greatly impact your ability to get coverage at a decent rate, and may affect your ability to get coverage at all.
3. The area you live in- anyone who lives in a major city knows the perils of rush hour traffic. One small fender bender leaves the whole city stuck on the interstate. You are much more likely to be in one of those fender benders if you live or work in this heavy traffic areas and your rates will be higher than someone that lives in a small town as a result.
4. Your deductible- the amount you set as your deductible affects your premium rate. The higher your deductable the lower your premium as a general rule.
5. Basic coverage amounts- your policy is made up of several basic parts. You have control over how much coverage you purchase above your states minimum required amounts. Liability covers damage to other people's property. Collision covers damage to your own vehicle. In an accident that is your fault. Comprehensive covers damages to your personal property and vehicle in the event of natural disasters, vandalism or theft. Medical covers the medical bills that result from an accident.
6. Extras- there is many extras that can be added onto your policy, and while they do offer protection they also increase your premiums. Uninsured and underinsured motorist covers your expenses in the event you are hit by someone who is not carrying insurance or amounts above what their policy covers. Without it you could be left holding the bill even if the accident is no fault of your own. Add-ons like personal injury protection, towing expense coverage, rental car reimbursements are convenient, but may be worth covering out of pocket to keep your payments low.
See Also : game Insurance, Auto Insurance Low rate remortgage Structured settlement lump sump Compare auto insurance prices
No comments:
Post a Comment