Many studies are done by the companies in order to determine your car insurance rates. There is a vast number of variables that have to be accounted for when a given company calculates your quotes, in order to estimate as precisely as possible the probability of you falling victim to a theft, robbery or car accident, and then calculate how much every single of their customer should pay monthly in order to for their balance to be positive after paying for every single of their costumer’s sinister.
Since cars are extremely valuable and prone to all sorts of incidents and accidents, car insurance is a mutualistic benefit – it helps both the companies and the costumers a lot. The costumer only has to pay high rates if they’re likely to be in a situation where insurance would be needed, so it won’t be a useless cost for them; on the other hand, if it’s unlikely that they’ll need it, they have to pay very little, so the laws of probability work in their favor.
Location is one of the factors that influence on your rates the most – if you either live or frequently drive in an area statistically considered dangerous, it’s likely that you’ll need the insurance, therefore your rates go up. This also takes in account how much you use your car; if you live in an area where accidents happen often, for example, but you very seldom go for a drive, its unlikely that you’ll crash.
Another factor which heavily influences on your insurance rates is your experience. This is determined by your Motor Vehicle Report, which accounts for every car accident you’ve had and every infraction you’ve committed; and your age, which will determine for how long you’ve driven and therefore how familiar are you with driving.
Many aspects of the vehicle in question are taken into account when you drive, especially the model and year of the auto. A very valuable car will certainly demand higher rates, since it’s more likely to be robbed or stolen, whereas a cheap one is unlikely to have that happening. Results of the experiments done on the car before its released, especially ones related to crashes, are frequently taken into account.
Some other factors are less evident than the usual ones. For instance, according to the insurance companies’ research, men are much more likely to be involved in an accident than women, and single drivers run a higher risk of crashing than married drivers. This is believed to happen due to testosterone, which makes an individual act reckless and impulsive, and is much more abundant in men, and even more so in men who are single.
In the end, after you make sure you’ve lowered your risk factors as much as possible, it comes down to picking a company which takes the risks which are high for you less severely. Make sure to compare the rates of all insurance companies (get the best auto insurance companies) whose services you can hire, since they vary a lot by the company’s research and formulas.