Personal Finance and Investing

Car insurance rate quotes can vary from person to person. There are many factors that are taken into account when setting up a car insurance policy such as what kind of car you have, what kind of company you are buying the insurance from, how much coverage you want, what your driving record is and even where you live. It’s important to set a budget for yourself to know how much you can afford to spend on insurance. It’s also important to know what type of coverage you will need for your car. You don’t want a policy that gives you coverage you don’t actually need.

Do some research to see what kind of policies are out there and make a list of the features that you feel are absolutely necessary for you to have in black and white. Take your time to make sure that you have listed everything you need. This is the only way to compare what insurance companies are offering right now that apply to you.

Once you have this information you can start comparing insurance rate quotes from different companies to see how much each company will charge you for the same type of coverage. Some companies will offer better types of coverage with certain vehicles than others. If you have a bad driving record it will impact on the premiums you need to pay for your policy every month. There is unfortunately not much to be done about it but to be a more considerate driver in the future. Eventually you will begin to save money as your policy progresses. Kick start the process by comparing car insurance rate quotes.

The area you reside in can have a strong influence on car insurance rate quotes. If you live in an area that has submitted a lot of claims over the last several months, your premium is likely to be higher. This is especially true of areas that have a higher crime rate and car break-in incidences.

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The main thing to understand about discounts is the thinking behind them. The insurance companies want to encourage you to act in ways that favor them. If you are contrary and do the opposite, you will probably cost them money so your premium rates will be higher. Let’s take a few examples and see how it works. Obviously the point of insurance is that, if you have one of those unfortunate accidents or someone steals your vehicle, you get to claim money from the insurance company. From the insurer’s point of view, this is bad news. It wants to be able to treat all your cash as profit. The more it has to pay out, the more it should raise premiums. Except, at some point, you throw up your hands and say, “We’re not going to pay that.” So a balance has to be struck. The insurer wants all the safe drivers like you, and aims to discourage all the drivers with bad records – they are the ones who get the really big premium hikes. Although loyalty bonuses go some way in the right direction, there are more ways in which the insurer can save money. It all starts with the make and model of vehicle you are driving.

Risk assessment is done by the actuaries. These are the math wonks who collect details of every accident reported in the US. This is not just the data from claims on vehicle insurance. This is every incident reported to the police, attended by the firefighters or ambulance crews, or dealt with through claims on health insurance. Put all this together and the actuaries can tell you the probability of an accident in any make and model of vehicle, given its color, whether it was fitted with any additional features, who it was driven by, the time of day or night, whether the driver and passengers were badly injured, so on. Yes, it’s that detailed. Turning this around, if you drive a vehicle that’s statistically unlikely to be involved in an accident or stolen, your premium will be lower than average. Put a safe driver in a safe car and the chances of the insurer having to pay out are small and the profit is higher. Everyone is happy. So how do you find out which are the safest vehicles with the lowest premium rates? Well, you start with http://www.safercar.gov/, a site run by the National Highway Traffic Safety Administration. This allows you to get the safety ratings from all the tests carried out by the NHTSA. There’s a guide published at http://www.nhtsa.dot.gov/staticfiles/DOT/NHTSA/Vehicle%20Safety/Articles/Associated%20Files/2009_Insurance_Costs_Comparison.pdf which is also helpful. Finally, the Insurance Institute for Highway Safety publishes its own list of safe vehicles at http://www.iihs.org/ratings/

The safer the vehicle you drive, the greater the discount on the premium rate. So when you are filling out the questionnaire for those auto insurance quotes, aim to have a safe vehicle. If you vehicle is not safe and you cannot afford to change it, try to upgrade it by fitting safety features. Look at the questions asked in the questionnaire and talk to insurance agents to find out what features save the most money. Similarly, fit better locks and any systems making your vehicle more difficult to steal. Anything you can do to reduce the risk of a claim will be reflected in low rates in the auto insurance quotes you receive.

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