How The Pricing Of Car Insurance Premiums Is Determined
When shopping for a car insurance policy, your aim should be to protect yourself and the car against possible risks. Your first instinct will be to try and pay the least possible amount for an auto insurance policy. Here are factors that will affect your premium rates.
Your Driving Record
Your insurance provider will determine whether you have been involved in a car accident before setting your insurance premium rate. Drivers involved in multiple accidents are a high risk for insurance providers. Therefore, if you don't have a clean driving record, you will pay a high premium rate. Also, insurers set high rates for drivers with DUIs.
How Often You Drive
Another factor influencing premium rates is how often you drive. If you commute a long distance to work, you are likely to pay more. People who use their vehicles for short errands on weekends pay low premium rates. A general rule for insurance providers is that the more miles you cover, the higher your susceptibility to risk.
Your Car Insurance History
You will pay a high premium rate if it is your first time getting an insurance policy. Insurance companies don't have much information to determine a new driver's risk potential. Furthermore, a coverage gap can increase your premium rates. This is the period when you don't have auto insurance.
For example, if your previous policy was canceled for non-payment and you spend time before applying for another policy, this gap will increase your insurance premiums. If you don't own a car and lack car insurance, you can avoid the coverage gap by opting for non-owner car insurance. This option ensures you have continuous auto insurance coverage.
Other Drives on Your Auto Policy
Some people who take auto insurance use their car with members of their household. For example, your spouse or children may be using your car. Your insurer may have to pay a claim if these other drivers are involved in an accident.
Therefore, insurance companies usually inquire about who else will be using your car and their driving history. If you have a teen driver in your household, expect to pay high premiums. The same applies to spouses involved in multiple accidents or DUIs.
In Closing
Many people shop for car insurance without considering the price implications. It is essential to determine ways to minimize your auto insurance cost. This may include bundling policies, taking advantage of discounts and offers, and cleaning your driving record.
For more info, contact a company like Del Toro Insurance Miami Miramar Plaza.