Reader’s Question:

What makes an insurance premium higher and lower? I have no idea what affects car insurance premium.

Jane

Portland, OR

Purchasing car insurance can be very tricky. It can become very expensive if you have no idea on how to lower your car insurance cost. If you also don’t find ways to negotiate your costs, you will also forgo the chances of getting savings.

It’s not like maintaining an insurance can drive you to the poor house. However, why pass on the chances of having lower rates when you are entitled to one, right? Why not know about the factors that can affect your insurance cost that way you can have full protection at your satisfaction?

To give you an idea, here are some factors that have direct effect on your insurance premiums. Understanding them will drive you to the path of knowing what to do should you consider having one.

Credit History

Insurance companies will always regard this. This is where they can evaluate how well you do in maintaining your debts. The better it is the lower your cost are.

Driving History

Insurance have underwriting process. They will also look into your records to see if you are a high liability to the company. People, who have no history of violating road rules and driving regulations, are great candidates for cheaper cost.

Biographic Data

Age, gender and your civil status has a direct effect to your cost. This is statistics-based which means, your cost will increase depending on the concluded risk in every category. Even the area where you constantly drive can also affect your cost. If your location has higher number of accidents, you will most likely be affected with this.

Occupation

Your work can tell how good you are as a driver. That’s based on statistics. Anyone who’s always on the road while doing their job can be in higher risk for accidents, thus increasing auto insurance premiums.