Car Insurance: What Factors Determine How Much You'll Pay?
Everyone who drives a car in America must carry car insurance
. This law ensures that everyone is covered financially if there is an accident. However, because premiums are based on statistics, you may find that you are paying more for your policy than someone else. There are a number of reasons why that may be. Adjustors use these factors and put them into a mathematical equation to determine how much you'll be expected to pay. It isn't something they just came up with off the top of their heads. They carefully determine how much they must charge each customer in order to still come out ahead. Here are some of the factors that play into the final number.Your Age
Age is a big one. Statistics show that drivers under the age of 25 are far more likely to be involved in a major accident than those above that age. While you may be the safest, slowest 22 year old you know, it won't make much of a difference to the car insurance company. They are interested in hard numbers only. Sorry.
Gender
Sexism is a word without meaning in the world of car insurance. It may get under a man's skin to know that he would be paying less for his policy if he had another X chromosome, but, again, it all comes down to numbers. The numbers state that women are less likely to file a claim than their male counterparts. That's all the reason a company needs to adjust the rates accordingly.
Driving Record
This is a no-brainer, of course. If you've been involved in several accidents, have a few points on your license, or have ever been picked up for driving under the influence, you are going to pay much more for car insurance than someone who has a clean driving record. There are things you can do about it, however. Look for driving schools which promise to deduct points from your license for completing the class.
Your Car
You're going to pay more for car insurance if you drive a brand new Viper than if you drive a 10 year old station wagon. A sports car is looked at like a red flag, particularly when combined with some of the more undesirable characteristics listed above. Some companies even look at the color of the vehicle. A red car might pay more than a white one, in other words. It sounds ridiculous on the surface, but it all comes down to statistics.
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