Paying car insurance premiums can become a burden to someone’s pocket. Yet, the need of carrying auto insurance is not something that can be ignored. To deal and possibly avoid this undesirable situation, one should understand the factors that influence premium rates of motor insurance.
Geographic location
One impressive factor that affects the insurance rate is your geographic location. If your area of residence has low traffic, you can expect to pay lower rates. In big cities like the metro, the roads are busy day in and day out hence, premium rates are higher. Additionally, car theft statistics, rain and/or earthquake frequency, are also factors that play a part in the insurance rate calculation.
Personal factors
Insurance providers do not play favorites just because women tend to pay less than men. It’s simply because women are believed to be safer drivers. Likewise, married individuals pay lower premiums compared to single clients. Also, drivers who 25 years and younger are paying the highest rates while those between 50 and 65 years of age are paying the lowest rates.
Engine type
Any vehicle that runs on diesel is expensive which makes its IDV much higher. If you happen to own a diesel-engine type of a vehicle, do not be surprised if you see that the quotes are much higher compared to policies for a car that’s run by CNG or petrol.
Coverage type
Just like in any type of insurance, be it for healthcare or motor vehicle, the wider the coverage the more costly it becomes. Comprehensive coverage provides more benefits to the policyholder so it is expected that it has a higher premium compared to third-party liability insurance.
Plan customization
There is no car insurance coverage that has everything covered, even comprehensive policies have certain features that you have to purchase as an add-on. If you want a complete package that fulfills every insurance requirement that you have, expect to pay more in premiums.
