Car insurance calculators help drivers estimate the cost and coverage needs of a policy, though these tools can sometimes be misleading as each insurer uses its own rating factors when calculating rates; meaning that similar information could yield different rates for two drivers with identical vehicles and similar driving histories. To get accurate rate estimations, drivers should compare quotes from multiple providers before making their purchase decision.
Insurance providers take many factors into account when calculating premiums, and although each insurer may use different calculations methods, most use general guidelines that are fairly consistent across insurers. Common rating factors among insurers include age, driving record, location and coverage selections. Your vehicle make and model can also have an effect; insurers look at theft rates and crash ratings to assess risk.
One major factor that contributes to premium determination is your state’s minimum car insurance requirements. Some require only liability coverage while others demand more comprehensive and collision coverage to cover damages caused by accidents. While some drivers opt for only minimum requirements in their state, others choose more extensive protection for peace of mind and financial security. Your choice of coverage amounts will also have an effect on rates as will your deductible amounts (the amounts you must pay out-of-pocket before insurance kicks in).
Your credit score is one of the few rating factors over which you have some control. Insurance providers use it to assess risk profiles, with those with higher scores tending to file claims less often and thus receive reduced rates from insurers. Paying bills on time and building an excellent history will only strengthen this factor and ultimately lower insurance rates over time.
Some states charge drivers living in dense urban areas more, while insurers might use historical loss data to predict what their rates should be. Because these variables cannot easily be taken into account by using an online car insurance calculator, it is wise to compare quotes from multiple providers prior to making a decision.
Car insurance calculators typically ask for your age as an estimation of how much car insurance premiums might cost; however, other insurers will take other factors such as gender, driving record and even name on policy into consideration that could impact how much coverage will cost.
Your coverage choice is also an important determinant of your rate. Liability car insurance is generally the least costly form, covering damage caused to other people’s property and injuries that you cause, while collision and comprehensive policies cover damage done to both yourself and other cars as well. When choosing higher levels of protection, your premiums will increase accordingly.