What Determines Car Insurance Rates?

Posted in Auto Insurance , Auto Insurance Quotes

February 22nd, 2009

Car insurance premiums are determined by a number of factors, including how well it sells, according to recent information from Insure.com. With individuals looking to cut costs in as many areas as possible, knowing how to lower insurance rates is a great benefit.

The Type of Vehicle You Own Can Affect Your Premium

According to Insure.com, your premium can be affected by how well your vehicle sells. In order to explain this idea further, they took at look at the nations 20 best-selling vehicles. While the vehicles car insurance rates did not show an exact correlation between a high premium and the best-selling vehicle, some of the highest rates were tacked onto those cars that seem to sell the most.

What Else Affects Car Insurance Costs?

As mentioned previously, there are a number of factors that determine what raises or lowers the cost of car insurance. Here are a few:

• Loss history. One factor that determines the cost of car insurance is the loss history of a vehicle, which includes how often it is stolen, how many accident claims are filed and for how much money, and how many passenger injuries occur in a crash. The more loss history there is to account for, the higher your premium is likely to be.
• Driving characteristics. In addition to loss history, driving characteristics are looked at, which are specific to you as a person and driver. Driving characteristics might include your age, where you live, what your driving record is, and what your annual mileage is.

How You Can Save

Since your car insurance premium can add hundreds of dollars to your vehicle expenses each year, its a good idea to consider insurance rates before purchasing a vehicle. By asking for quotes on vehicles youre interested in buying, you can gauge the overall cost of your vehicle to avoid the surprise of unexpectedly high rates after youve already paid for the car.

Your car insurance premium doesnt have to be your financial downfall. By learning more about what affects rates, you can make the best decision for your pocketbook.