Automobile insurance rates are based on a number of factors, most importantly the driver's medical and driving history.
the more accidents and traffic violations they have the more likely it is that they represent a higher risk for insurers, so their premiums will be higher. that risk is also linked to age and gender- specifically males in their mid-20s livelier in danger than females in their same age group. for instance, men aged 30 years old pay an average of $600 per year while women pay an average of $600 per year
insurance companies also place great importance on less tangible issues such as your social class and lifestyle (whether you live in a low crime neighborhood), where you live (driving conditions like icy weather
what factors affect auto insurance premiums?
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what are the 7 factors in determining the premium for automobile insurance?
the 7 factors in determining the premium for automobile insurance are:
-car accident frequency in your geographical area
-driver record and qualifications (involvement in accidents)
-location where driver lives and works (distance from home to work)
-driver age and gender (riskier drivers pay more) -deductible level of coverage you choose for repairs or replacement of a vehicle, whether comprehensive or not. comprehensive pays also if covered by 3rd party liability claim, does not cover theft; non-comprehensive will only compensate for what you actually paid toward your auto loan/lease or purchase price.
premiums vary, then there is the matter appearance like age
what causes insurance rates to go up?
insurance rates go up for a number of reasons. they can include fraud, sudden changes in family situation, age approaching retirement eligibility and the company has to cover you there entire life, or because a company needs to offer an option to their customers in a certain range of coverage.
of course, fraud makes up a large percentage of it. the number one reason for fraud is overstated policy values. this way the client only pays into their policy that one time but then receives money from the company after they file a claim–so clients would say that not only do they have life insurance worth $1 million but also includes accidental death for double indemnity payouts and inflation protection which means they will get more money out when they want it.
how is the cost of insurance determined?
insurance is determined by weighing the loss you would incur against the likelihood that an event will happen. your insurance company calculates this by using averages across all policies for a specific policy type, so making decisions based on the calculations of one specific company or professional is unwise.
it's safe to say that insurance costs are overestimated because there's no way to know if your car will break down next year. this means you're paying more than you should be. so before taking out any insurance, do your homework and read reviews of customers who've had experiences with that company or service provider to evaluate them properly before deciding what level of coverage is right for you!
