When you purchase auto insurance you want to get the best rate possible. So, it is helpful to understand the process that insurance companies use to calculate your rate. Different states consider different factors as do different insurance companies. Here is a comprehensive list of what factors will probably be considered when you apply for an auto insurance policy:
How frequently you drive - If you put more than 15,000 mile a year on your car, you will be charged a slightly higher rate. Insurance companies figure the more you are on the road, the more likely you are to have an accident.
How good a driver you are - If you have been ticket and accident free for the past three years, you will typically get a lower rate. The insurance company will request a Comprehensive Loss Underwriting Exchange (C.L.U.E.) Report on you, which tells them all the insurance claims you have made in the past five years. You can get your own copy of the report from The ChoicePoint Consumer Service Center for a small fee. The insurer will also check your driving record by contacting your state's Department of Motor Vehicles.
What kind of car your drive - You cars value, safety record and probability of being stolen are all considered. Cars that are safe, less likely to be stolen and are cheap to repair will cost less to insure.
Where you reside - City and state may also be taken into consideration.
What your age, sex and marital status are - Young drivers and older drivers may have to pay higher rates since statistically they have more accidents. Some companies also consider sex and marital status. Girls rates are lower than boys and married people rates are less than singles.
Your occupation - If your job requires a great deal of driving, you will get hit with a higher premium.
What sort of coverage you choose - You will pay more for each additional type of coverage you choose based on the amount of coverage (policy limit) and the deductible. In other words if you add coverage for uninsured motorists or rental car coverage your premium will be higher. Also, the higher amount of coverage you choose the higher your premium.
Your credit rating - This one sometimes surprises people but increasingly more and more companies are considering your credit rating when they calculate the rate you will pay. Insurance companies feel good credit equals good drivers.
Insurance companies offer many different kinds of discounts. Some companies will reduce your insurance rate if you are: a non-smoker, drive less than the specified number of miles per year, carpool to work etc. Be sure to ask what discounts a company offers and see if you qualify.
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