Car insurance rates are like fingerprints. It varies with the different kinds of coverage opted for. The cost of your insurance depends on a lot of factors apart from the type of coverage you choose. It depends on you, your car, your driving record, your location i.e., where you live and drive etc. Even from state to state insurance rates vary starkly. All these factors come into the picture when your car insurance rates are decided. In the case of states where there is a high rate of auto thefts, traffic, accidents and other risks you are required to pay a high premium for your auto insurance. But primarily, the rates depend on the coverage you carry.
The rates of the insurance vary with the coverage, with the minimum rate being for the Minimum Insurance Requirements that the law requires every vehicle to have. However, this does not provide for much in the aspect of protection in the case of accident, and as such should not be the only insurance covered even though it is low cost. Liability coverage costs more than the minimum insurance requirements but it ensures that your property is protected. However, on being found at fault, even in the occasion of your damages being covered, the premium may rise up significantly. Then there is the cost-effective umbrella liability policy, in which you can subscribe different policies such as home and vehicle insurance under the same company and avail attractive rates and good discounts.
The rate of the premium also depends on the state of your car. The insurance rates are decided by the safety ratings given by the Insurance Institute for Highway Safety. The agency conducts tests and comes out with ratings based on which the insurance rates are calculated.
Another factor which determines car insurance rates is the driving record. Being involved in accidents with the fault being on your head, the insurance companies hike the premiums. If, with a bad driving record, you don’t qualify for any auto insurance coverage, you get assigned to an assigned risk pool, since insurance is mandatory on all vehicles. The company to insure the driver with poor record will be chosen at random from the pool. The premiums for such a programme will be extremely high, for up to three years until the record is cleared. Such a driver has no say in the choice of the auto insurance company providing the coverage.
The high insurance rates can be curbed to a great extend by availing discounts. First and foremost way is to convince the insurance company that you’re a safe driver. A clean record goes a long way in keeping the premiums reasonable as well as for availing discounts. Air bags, anti-lock brakes, anti-theft and certain safety measures in your car further reduces the rates. Low mileage drivers, infrequent drivers, student drivers with good grades, and even older persons can get discounts. The trick is to know your coverage, know all the available coverage, know what you really need, and also know the discounts available. But nothing beats getting a good car insurance rate than safe driving.
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