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Why You Want Car Insurance

When you first bought that car, you were probably mainly concerned about how it looked and how much you had to pay each month. However, if you want to keep driving your new ride, you need to understand the importance of car insurance. There are a lot of options out there, which is why I decided to make a website about auto insurance policies. As a car enthusiast, I currently own 21 cars, and I could tell you horror stories about people who decided not to worry about insurance. If you want to protect your investment and your personal wealth, auto insurance is something that you need to have. I made this website to teach others about auto insurance, so that you can make a great choice.

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Why You Want Car Insurance

4 Main Factors That Influence The Costs Of Auto Insurance Premiums

by Luke Fisher

Auto insurance is something that every driver needs, but the costs on policies can very drastically. Have you ever wondered what factors really play a role in the costs of an auto insurance policy? It can depend on the insurance company, but the cost of most auto policies are based on the following four factors.

Where You Live

The province you live in automatically plays a role in the rates you will pay for your auto insurance. If you live in Ontario, you are likely to pay more for your insurance than if you lived in another province, because Ontario car insurance rates are higher than any other province. The main reason for these high costs is that insurance fraud claims are extremely high in Ontario. The province of Alberta has the second highest rates in Canada.

Your local area plays a role in the amount you pay for auto insurance, but this is not the only factor involved in the calculations.

The Coverage

The amount of coverage is also factored in when insurance rates are calculated, and this involves three main factors:

  • The type and year of vehicle you have – Car insurance rates are based on the value of a car. Anytime you insure a newer car, the coverage is likely to be more than if you insure an older vehicle.
  • The amount and type of coverage – You have options when it comes to the coverage you place on a car. If you choose full coverage (which is required if you have a loan on the vehicle), it will cost more than if you had liability coverage only. If the car is older, and you want to save money on the policy, get liability coverage only.
  • The deductible – Finally, the deductible amount you choose will be factored into the cost of the policy. To get a lower premium on the policy, raise your deductible. The lowest deductible available is usually $250, but you can choose a deductible amount of $500, $1,000, or even more.

Your Driving Habits And Record

The third factor that is used to determine the rates on your policy involves your driving habits and record. People that drive very little can get lower rates than people that drive a lot. Insurance companies generally ask people how much they drive before giving quotes for policies, because this detail matters.

You should also realize that an insurance company will look at your driving record to find out what type of driver you are. If you have a clear record that is free from accidents and violations, you will probably qualify for a good driver discount. If your record shows accidents or traffic violations, it may bump you into a higher-risk category.

Insurance companies often look at the last six years of your driving history to find out what level of risk you have. If you want an insurance quote and have an accident on your history that was five years ago, you may want to wait one more year before requesting a quote. By doing this, your record will be clear.

Demographics

Finally, insurance companies factor in your demographics when calculating rates. Demographics refers primarily to your age and gender. Statistical information is used to determine rates, and statistics on drivers generally reveals that young drivers are more likely to get in accidents. Young males are among the highest risk drivers to insure, but young females can also be more costly to insure.

If you want to get the best rate on your insurance policy, call an insurance company and request a quote. Ask the company about all of the available discounts you may be able to take advantage of, and always make sure you are a defensive, cautious driver so your record can stay clean.

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