How To Obtain The Cheapest Auto Insurance In 2018? What Factors Do Insurance Companies Consider?

Obtaining cheap insurance for your vehicle is something that all drivers strive for. Auto insurance is a necessity that is required in order to legally be allowed to operate a vehicle on public roads. Its primary usage is to provide a form of financial protection from physical damage or bodily injury which results from traffic collisions. Additionally, it also provides protection against liability that could also derive from incidents in a vehicle. In an effort to obtain an insurance policy that is cheap as possible while also protecting you as much as possible, individuals seeking to acquire an insurance policy often shop around initially. Although you may have encountered advertisements and commercials placed by insurance companies claiming that they have the cheapest rates, this may be far-fetched. The truth is, no single insurance company has the cheapest rate for all individuals. This is because everyone’s rates greatly vary due to a number of factors. Below are the factors that insurance companies consider before quoting a customer a rate.

Crash history:

Drivers who regularly are at-fault during accidents, as well as those involved in car accidents generally pay more to be insured. Maintaining a good, accident-free driving record is perhaps one of the most significant factors that insurance companies scrutinize when giving you a quote. However, if there are a few accidents on your record, there is no need to panic and leave that insurance company. As time goes on, the effects of your driving history or record will decrease, while ultimately decreasing your premiums.

Personal demographics:

Statistically, the potential for an individual to be involved in an auto accident, regardless of fault, is significantly higher for those drivers under the age of 25 years old, especially males. Consequently, this is why you often hear of car insurance rates dropping for individuals once they turn 25 years old, assuming they’ve been accident free for a duration of time. Additionally, some insurance companies give drivers incentives who are good students. Upon providing these insurance companies with proof of your grades, you may be in-like for an additional discount. Younger drivers in general are typically more expensive for insurance companies to insure. Given their lack of driving experience, they can be more vulnerable to be involved in an accident. One way to take advantage of this preemptive high cost for insuring a younger driver is to have them enroll in a driving safety course. Upon completion, many insurance companies will actually give the drivers who complete the course a generous premium discount. Furthermore, if you live in an urban area where the likelihood of your car being vandalized or stolen is high, your insurance rate may be high as well. However, if you lives in a small town where the crime rate is relatively low, your insurance rate may not be impacted.

Annual miles driven:

Essentially, the more miles you drive a vehicle, the more you will he operating the vehicle on public roads. Consequently, since you will be doing more driving, there is a higher chance that you will be involved in an accident. Insurance companies take this into consideration when giving you a quote during the application process. Furthermore, some insurance companies will actually give you a discount if you drive less than a specific amount of miles each year. Although many claim that the number of mileage do not impact the quote too much, some insurance companies have utilized in-vehicle technology to track the amount of miles you drive, and ultimately billing you only for the amount of miles you drive each month.

Vehicle type:

Driving safer vehicles can actually lower your insurance rate, and vise-versa. This is determined by the insurance providers collecting vehicle safety rating data from other customers’ claims. By analyzing the industry safety reports, they are able to provide discounts to those who drive safer vehicles, although this varies. Opposingly, the opposite methodology can apply. Customers who drive dangerous or flashy vehicles that are susceptible to theft and injury are generally quoted a higher price. Cars such as a two-door BMW may be more likely to be involved in an accident, or experience vandalism or even theft. As a result, it is critical to know the vehicle’s safety rating before making a purchase.

Credit score:

Given that the majority of insurance companies take your credit score into consideration before providing you with a quote, it is significant to maintain a good credit history and score. This may actually carry a positive impact on your annual premium.