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					                       Rating factors used to determine car insurance premiums

It’s a known fact that car insurance rates vary from person to person and company to company. Many
factors affect the way car insurance premiums are calculated. Though these factors are common to most
car insurance companies, they weigh them differently to calculate rates for their customers.

Here’s a list of the most important ones:

    1. The car make and model
       Not only are different car models rated differently by insurance companies based on their safety
       ratings, how much they cost to repair or replace also affects car insurance premiums to a great
       extent. Statistical methods are used to find out data such as which cars are stolen the most,
       which cars are damaged the maximum in a collision, which ones have the most expensive
       spares, the ones with more powerful engines etc. That’s the reason compact crossovers,
       minivans and SUVs are the cheapest cars to insure this year, while Mercedes, BMWs, Aston
       Martins and Pontiacs are among the most expensive ones to insure.

    2. Number of drivers and their driving records
       Every driver that is added to a car insurance policy is naturally going to contribute to higher
       rates. The previous driving record of a driver indicates to the car insurance company whether
       s/he is a high or low risk proposition. Too many tickets, especially of moving violations, escalate
       car insurance premiums while clean driving records are encouraged with discounts and lower
       deductibles. So, if you’ve been in any accidents in the past, it is bound to affect your car
       insurance premiums.

    3. Location
       Urban areas have a greater density of traffic and are bound to attract higher car insurance
       premium rates. Areas which show higher incidence of theft, riots, accidents and uninsured
       drivers are also going to have higher rates. That’s why TX car insurance is higher than OH. Also
       different state laws demand different coverage options and these have a direct bearing on car
       insurance premiums.

    4. Age and gender of driver
       While women get into minor accidents, men get into more serious ones, so men pay higher car
       insurance premiums. Mature men aged 45-65 pay the lowest rates while younger drivers,
       especially teens pay the highest car insurance premiums; so experience behind the wheel does

    5. Marital status of driver
       Based on statistical analysis, insurance companies rate married people as mature and
       responsible drivers. Single people are considered to be more risky propositions as they have less
       to lose, so their car insurance premiums are higher.
6. Credit history of driver
   Simple logic; if you have more money in your bank account and pay your loans on time, you will
   pay your car insurance premiums on time too! Those with a good credit history are bound to be
   less tempted to make claims against their car insurance companies, costing them less as
   customers, hence they pay lower car insurance premiums.

7. Education and occupation of driver
   A good grade in high school can get credits and discount on your car insurance premiums. Also a
   “safe” occupation like that of a teacher shows you as lower risk proposition and so your rates
   are lower. If you have consistent employment history, you come across as a more stable and
   responsible individual with a regular source of income to the car insurance company and so are
   charged lower rates.

8. Previous Insurance coverage carried/ first time driver
   Since a first time driver lacks road experience, the rates are bound to be higher. Also, the
   insurance company has no access to your driving record, so they don’t have any clue what kind
   of driver you could turn out to be. Insuring you is a huge risk they are taking. This makes your
   car insurance premiums high! Also, the car insurance coverages you were carrying previously, if
   any, show the prospective new company whether you buy minimum coverage just to be legal or
   are a serious customer!

9. How the car is going to be used
   Whether your car is used for business, pleasure or commuting, where it’s going to be parked for
   most of the day, is it going to be driven through crowded areas etc., affect the calculation of
   your car insurance premiums. If the car is being driven for late night parties regularly for
   example, you can expect to pay higher rates.

10. What coverages and limits you buy
    This one is obvious! The more coverage you add to your car insurance policy, the more money
    you pay, as you are transferring more risk to your car insurance company. However it’s better to
    buy good coverage options for adequate protection. Rates can always be lowered by keeping
    higher deductable options. Also shopping for car insurance quotes can save you money;
    however ensure you check the financial stability and claim handling reputation of the car
    insurance company that you go with.

    While some factors that affect your car insurance premiums like your age, location, number of
    drivers might not be in your hands, others like your credit and driving history, how you use the
    car, where you park it, are things you can work around to get lower car insurance premiums.
    Good luck!

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