Auto insurance – Why Are Your Premium Payments So High?
If you have taken out car insurance and are surprised as to the high payments you have for your premium, you might be wondering why every insurance provider you have tapped cannot seem to give you a lower rate. You have to keep in mind that just like any other insurance policy you have, a car insurance provider needs to take a look into many factors to give you a fair price for your auto insurance.
First off, your coverage policy is a big consideration in the premium payments you make. There are three types of insurance coverage and each of then has its own price tag. If you opted for a full coverage, or a comprehensive type of insurance, then your premium would really be expensive. This is because there are more risks that you have chosen for your insurance provider to cover. The second type of insurance is cheaper but will not cover damages to your automobile that is not caused by you. This type of insurance assumes that the person at fault will cover your car repairs costs. The third type of insurance is the least expensive but has less coverage than the previous two mentioned. For a more detailed explanation of these three types of coverage policies, you can ask your insurance agent or you can do your own research online.
Another prime factor in your car insurance premiums is the make and model of the car you have insured. If you have purchased a vehicle that is high end, like sports cars or sport utility vehicles, then your premiums would indeed skyrocket. Also, if you insure a car that has seen better days, then the insurance would also be high. This is because an old and ailing car will definitely require more coverage since it is considered prone to accidents and breakdowns. To keep your premiums manageable, opt for a traditional wagon or sedan instead.
The way you use your car also is a prime consideration in the insurance premiums you are paying. The more you use it on the road, the higher the premiums will be. In risk assessment, driving long hours makes you more prone to accidents and damages. Additionally, who drives your vehicle is also investigated upon by the car insurance provider. If you let your teenager drive your car, or an elderly person in your family, then the premium will definitely skyrocket. For a teenager, you can choose to enroll him or her in advanced driver’s education classes and if passed, then there is a big possibility that your insurance provider will lower your premiums. Moreover, if your child has good academic standing, you can utilize it as leverage for discounts in your insurance payments. For your elderly loved ones, you can keep your insurance premium costs low if they only drive short distances.
Lastly, your credit history and credit score are looked into as well. If you have a less than stellar credit performance, you might want to repair it before purchasing insurance for your car.
See: Gas Cards