1273543,GURVIR SINGH,Q24> COST FACTOR IN INSURANCE SECTOR?

There are a number of key factors most insurance companies use to calculate how much you’ll end up paying for your auto insurance. What’s important to remember is that you can control many of these factors.

Your location, age and driving habits all play a major role, as do the types of vehicles you drive and your record of accidents. In many cases, the choices you make about the coverage you want determine the cost of your premium.

Below is a more detailed look at six key factors that affect your auto insurance premiums, as well as some suggestions for keeping the costs down:

1. Your Coverage And Deductibles

Auto insurance providers allow you to choose your deductible and decide whether to add additional coverage that isn’t necessarily required by the laws in your state. The specifics of your coverage and deductibles play a major role in your monthly payment.

Typically, choosing a higher deductible means a lower monthly payment; choosing a lower deductible means a higher monthly payment. Additional coverage gives you added financial protection, depending on the claim, but will also add to your monthly costs.

2. What You Drive

By collecting a large amount of data from customer claims and analyzing industry safety reports, auto insurance providers often develop vehicle safety ratings and offer discounts to customers who drive safer vehicles.

Some insurers increase premiums for cars more susceptible to damage, occupant injury, or theft, and lower rates for those that fare better than the norm.

2010 Toyota 4Runners, for example, rate highly in terms of driver protection and passenger protection, which means discounts on insurance. And while two-door Honda Civics are one of the country’s most popular vehicles, their lower-than-average safety ratings and desirability to car thieves make them more expensive to insure.

Before you head down to the dealership, do some research. Does the vehicle that has caught your eye have strong safety ratings? Is the same particular model often stolen? Knowing the answers to a few simple questions can go a long way in keeping your rates low.

3. How Often, And How Far, You Drive

People who use their car for business and long-distance commuting normally pay more than those who drive less. The more miles you drive in a year, the higher the chances of an accident – regardless of how safe a driver you are.

Consider joining a car or van pool, riding your bike, or taking public transportation to work. If you reduce your total annual driving mileage enough, you may lower your premiums.

4. Where You Drive

Generally, due to higher rates of vandalism, theft, and accidents, urban drivers pay more for auto insurance than do those in small towns or rural areas.

5. Your Driving Record

Drivers who cause accidents generally must pay more than those who are accident-free for several years.

If you’ve been accident-free for a long period of time, don’t get complacent! Remain vigilant and maintain your good driving habits.

And even though you can’t rewrite your driving history, having an accident on your record can be an important reminder always to drive with caution and care. As time goes on, the effect of past accidents on your premiums will decrease.

6. Your Age, Sex, And Marital Status

Accident rates are higher for all drivers under age 25, especially young males and single males. Insurance prices in most states reflect these differences.

If you’re a student, you might also be in line for a discount. Most auto insurers provide discounts to student-drivers who maintain strong grades. In some states, younger drivers are also able to take driver safety courses that will lower premiums.