As part of your car insurance shopping experience, it’s useful to understand how rates are calculated so you can determine which coverage options best suit you and your family, and which companies have the lowest prices. An auto insurance calculator provides a fast way of providing an estimate of premiums across different levels and vehicles.
Each insurance company uses its own formula for calculating car insurance rates; however, several key elements typically factor in. They include:
Age and driving record – As you become older and your driving record deteriorates, your premiums for car insurance will also increase accordingly. Furthermore, having teenage drivers within the household will likewise cause rates to skyrocket.
Location – Both your state of residence and ZIP code play a large role in the price of car insurance premiums. Drivers in urban areas typically pay more due to higher traffic volumes and accident risks. Other influences that could alter your rates include crime rate, flood risk statistics, vandalism rates and theft records in your region.
Your Vehicle – Insurers place great significance on the model of car you drive, as its cost to insure varies based on factors like repair costs, likelihood of theft and engine size – including airbags and anti-lock brakes – safety features such as airbags or anti-lock brakes are considered when pricing out policies for insurers. Sports and luxury vehicles tend to cost more to insure than sedans or SUVs.
How Much to Insure – The amount and type of liability coverage you choose will have an effect on your premium, as will whether or not you accept a higher deductible. Raising the deductible can reduce premium costs; just make sure that if an incident does arise that it won’t exceed what can be afforded without increasing out-of-pocket expenses further.
Other coverages – Your choices in optional coverages such as comprehensive and collision can have a large influence on your rate, although they aren’t required in all states; nonetheless they can help protect assets if that is of importance to you.
At its core, car insurance must meet state minimum requirements. While it can be tempting to opt for the least-expensive policy available, this may not be in your best financial interest over time. Paying more may ensure adequate financial protection should you become involved in an accident or your car is stolen. While pinpointing exactly why rates increase or decrease can be challenging due to so many variables at play, knowing general factors at play can help you shop with confidence and find great rates on coverage – using an auto insurance calculator online is an ideal way of comparing quotes and finding exactly what works for you!