How do auto insurance companies set their rates?
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Here is a transcript of the video:
Auto Insurance is a necessity that you need if you own a vehicle. However, the task of trying to find the best auto insurance rate can be a frustrating and tiring endeavor, especially when it seems that each quote you get can vary drastically from company to company. When searching for auto insurance it is important to understand that insurance companies rely on a few common factors that help determine what your insurance rates will be. Let’s discuss a few of those factors to help you understand what insurance companies look for and to help you get back on the road without breaking the bank.
Location. Where you live and what zip code you are in does affect how expensive your insurance will be. If you live in a sprawling metropolitan with lots of traffic then the risk is higher for you to be involved in an accident and have to file a claim. However, if you live in a small country town with a small population it is less likely that you will need to ever file a claim, thus making your rates cheaper.
Age. It is common knowledge that younger drivers have higher insurance premiums. They do not have the experience of older drivers and statistically are more likely to be involved in accidents. Between the ages of 25-69 see the lowest premiums due to experience on the road and are less likely to file claims.
Driving Record. Have you had many accidents or other moving violations? Those will certainly affect your insurance premiums. Insurance companies examine your driving record, usually between 3-5 years, and determine the size of risk you pose.
Luckily, at Save Money Car Insurance we don’t penalize you for minor violations like many other insurance companies do.
Type of Coverage. Whether you need basic liability or full coverage auto insurance is a major factor in determining your premiums. Obviously, if you only carry basic liability on your vehicle that means that the insurance company is only responsible for paying out claims for one vehicle and not both parties so your premium will be significantly cheaper than full coverage which would be responsible for paying out on many more risks.
These are only a few of the factors that insurance companies use to determine their rates. There are many more that include: gender, marital status, credit history, previous insurance history, and type of vehicle.
Here at Cheapest Auto Insurance, we make it as simple as possible to get a quote and start a new policy. We do not charge for minor violations like many companies do. that way we help keep your premiums as cheap as possible to get you back on the road. We also offer many discounts including proof of prior insurance discount, marriage discount, automatic payment discount, and multi-vehicle discount. Visit us online at aautoandhomeinsurance.com to get a quote today!