For first-time car insurance applicants, expect that the premium you will pay will be affected by numerous factors. The rates are actually based on what kind of risk you pose to the company by the time you applied for insurance. The higher the risk, the higher the payment, and vice versa.
But aside from the risks you have as a person, other factors would either increase or decrease your monthly premium. Here are the basic ones.
Age
Individuals with ages between 18 to 25 generally pay heftier car insurance compared to other age groups. Car insurance companies based this on yearly statistics of car-related accidents. Based on a survey conducted by an independent thinktank, this age group is prone to accidents because of careless driving. This explains why insurers charge a higher bill to younger drivers.
Vehicle
The age and the model of your vehicle will likewise affect the rate of the insurance. Bigger cars such as those in the SUV category pay a higher premium because of their market value. Besides market value, the insurance company also knows that repairing SUVs has higher costs compared to sedans.
Driving history
Once you apply for car insurance, one of the requirements is for you to show your driving history. Most car insurance companies consider this because the driving history shows what kind of driver you are.
A clean driving record will significantly decrease your insurance cost. If your driving history is laden with violations, the company will charge you higher premiums. The more violations, the higher the pay.
Credit history
Some states also look into an applicant’s credit history. If you have a lower credit history, the company will be more lenient and will offer you a cheap premium. If you are a bad payor, the chances for your premium to be more expensive are high.
