Factors That Can Impact Your Auto Insurance Premiums

When you are paying one amount for your auto insurance but your best friend is paying something entirely different, you may wonder what is up. Well, insurance companies will look at a variety of factors when they are determining the amount that you will pay for your car insurance. The confusion can be cleared up when you look at these factors and understand a few things you can do to keep your costs down as much as possible.

Your Overall Policy and Deductible

The insurance coverage that you choose will have a direct impact on your premium. You are required to choose what your state mandates, but it is up to you if you choose to go above those limits. If you opt for additional coverage (and protection), then you can expect your premium to increase. Your deductible will also play a role in how much you pay. The higher the deductible, the lower your payment and vice versa.

Your Vehicle

Vehicle safety ratings tend to be developed by collecting large amounts of data from industry safety reports and customer claims. When you drive a safer vehicle, you are likely to receive a discount from the insurance company. However, if you drive a vehicle that is deemed more dangerous, you are likely to see an increase in your premium. Therefore, if you want to ensure that your premiums are kept to a minimum, you may want to consider the type of vehicle that you purchase.

Your Frequency of Driving

If you utilize your vehicle for long-distance commutes and/or for business, you are likely to have higher insurance premiums than someone who simply drives a vehicle for pleasure. The more miles that you drive your vehicle in a given year, the higher the risk is that you will be involved in an auto collision — and this is true regardless of how safe you drive. To minimize the number of miles you put on your vehicle, you may want to consider taking public transportation or joining a carpool.

There are other factors that insurance companies take into consideration when determining your auto insurance, such as your credit history, your driving record, where you live, your age, your gender, and your marital status. If you want to learn more about the factors that affect your auto insurance premium and what steps you can take to keep your premiums as low as possible, reach out to your auto insurance company.