Many factors go into determining an auto insurance premium: age, driving record, previous coverage, the type of vehicle you are looking to insure - even geography.
Below we detail some of the factors used to by insurers to determine rates for auto insurance, and why they should matter to you.
Your past driving record
A person's driving record plays a huge role in determining an auto insurance premium. If you have any speeding tickets or have filed auto insurance claims you can expect to pay higher auto insurance rates than someone who does not have this on their record. Slow down, drive carefully and save - plain and simple.
Gaps in insurance coverage
Most auto insurers consider drivers with gaps in their auto insurance coverage as potentially riskier to insure than drivers who have consistently maintained coverage. To avoid paying more for insurance, avoid having a lapse in your coverage, even for a short amount of time.
The vehicle you drive
This factor is based on the value of your car along with the expenses to repair or replace it. Vehicles that score well in crash tests normally will get lower insurance rates as well.
Where you live
Insurance companies determine auto insurance rates based on your location. So, if your area has high rates of theft or insurance claims, unfortunately you can expect to pay more for auto insurance to offset these costs. Also, highly populated areas have higher auto insurance rates, as you are more likely to be involved in an accident due to the increased congestion and vehicles in a given area.
Your annual mileage
Insurance companies tend to charge drivers with higher annual mileage more for auto insurance because the more a person drives, the more their chances of being in an accident increase. You may not be able to reduce the amount you drive based on location or your occupation, but looking for ways to combine trips can result in a reduction in mileage.
It's not always about low cost insurance
As you can see, the amount you will pay for coverage is dependent on a number of variables. Everyone wants to save on insurance, but the cheapest option isn't always the best choice. You need to consider your level of risk as well as the assets you need to protect. Saving on auto insurance is great, but you also want the right coverage, so a situation does not arise where your "cheap" insurance does not provide the necessary protection.
Reposted from: 21st Century Insurance