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Auto Insurance - which one?

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Auto insurance is often a sticky subject.

auto, cars, insurance

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Auto insurance is often a sticky subject. Everyone feels like they’re paying too much to insure their car, and
wants to know how to get their premiums down. It’s an industry that really lacks an effective way to make
price comparisons, leading many people to switch every few years the way they do with credit cards or
phone providers.

When you understand the factors that go into deciding the price you pay for auto insurance, however, you
should find it much easier to read the market and use it to your advantage. This article should give you a
basic grounding, but whole books have been written on the subject – it’s up to you how much you want to

The most basic thing you need to understand is that insurance companies don’t decide premiums based on
how much they like you, or how much they think you can afford. Insurance is based on one thing, and one
thing alone: risk. Every time the insurance company has to pay out for an accident, they keep a record of the
amount, and every other factor they can find – the make, age and model of the car, the age and gender of the
driver, where they live, how long they have had a license, and so on. There are hundreds of factors.

From this, the insurance companies can build up what is called a ‘risk profile’. This allows them to work out
the risk that they will have to pay out to any given person, and how much they would be likely to have to
pay, based entirely on past experience. This is why a newly-qualified male driver in his twenties driving a
sporty car has to pay so much to get insured – the statistics show that this group is by far the most likely to
have an accident.

Once you understand this system, you can use it to your advantage. Obviously you can’t change who you
are, but you can change your car. The make, model and age of your car are three quite important factors in
your risk profile, and they’re all open to you to change. It is not difficult to use online insurance quotation
tools to find out which cars are pricey in insurance terms, and which ones are cheaper, and use this to help
you make buying decisions.

affordable auto insurance

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