6 Factors that Influence the Calculation of Your Car Insurance

There are different factors that influence the rate of your car insurance policy. Some of these factors you can control and others you cannot. It is important to know what these factors are and how they influence your overall policy before you buy car insurance. The factors that can influence your policy include:

  1. Gender and age – Statistics have proven that more young men are involved in accidents and older women are more often involved in accidents. Based on this, younger men usually have higher insurance rates than women of the same age group. Older men tend to have lower insurance rates than women of the same age.
  2. Area you live in – Highly populated areas have more cars which increase the chances of an accident. The area in which you live, the traffic there, and the crime rates of the area may also affect your rates.
  3. Marital status – Being married reduces the risk for accidents. Statistics show that married people have fewer accidents than single people. This is especially good for men because their rates can be halved once their married and have a good driving record.
  4. Profession – Your job could increase or decrease your rates. Delivery people, journalists, and some sales people are on the road all the time and will have higher rates. Pilots, people who work from home, and others who rarely drive will have lower rates.
  5. Credit rating – It is not a given that your credit rating may influence your insurance rate, but many insurance companies bring it into account. A lower credit rating may result in a higher insurance rate.
  6. Age of the car – Repairs for old and new cars are generally the same. However, old cars are more likely to be totalled as the costs to repair old cars often exceed the value of the car. Newer cars will not be totalled that easily and may have higher collision coverage rates because they are more likely to get into collisions.

These factors determine how your insurance rates are calculated. Your driving history also plays a role and if you are a safe driver with a good driving history, you may have lower rates.

Different Types of Car Insurance Coverage

When you buy a car, it is necessary that you also get car insurance. Some states require car insurance and will not allow you to buy or drive a car without it There is different types of car insurance coverage to choose from. You may be unsure about which coverage will be best for you. Let’s have a look at five different types of coverage and why you may need it.

Collision Coverage – This covers expenses for damage repair to your vehicle in case of a collision. The policy will pay for all or part of the costs of repairs. If the cost of repairs is more than the car is worth, they write it off as totalled and pay out the amount of the car’s value.

Liability Insurance – This covers you in the event that you are involved in a car accident that is your fault. The policy generally covers damage to property as well as medical bills. Most states have a minimum amount that they require when it comes to liability insurance.

Personal Injury Protection – This type of coverage is very important and will benefit you a lot in case of an accident. Personal Injury Protection covers all costs of medical bills for you and your passengers no matter whose fault the accident was. Not all states offer this coverage so you should check what is available to you.

Comprehensive Coverage – This type of coverage is an extra to the other types. It is not a necessity but if you can afford it, it is a good idea to get it. Comprehensive Coverage covers non-covered accidents like weather damage, theft, or damage by animals. Normal car insurance coverage tends to only cover accidents and not these other types of damage.

Uninsured/ Underinsured Motorist Protection – This is a relatively inexpensive coverage to add to your policy. It covers instances where the party responsible is not insured or the amount they are covered for is less than your expenses. This means that your uninsured coverage will cover the excess costs that the insurance pay-out from the other party does not cover.

Car insurance is required by state law and it is for your own safety and financial preparation. If you are not covered, take action today. If you think you need a change in policy or need to add extra coverage, contact your provider today.