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4 Factors That Raise Your Premiums & How To Save On Each of Them

July 12, 2010

Have you ever wondered how providers determine your car insurance premiums?  If you have, you certainly aren’t alone!  If you think you might be paying too much for car insurance, recognize that the following factors have an impact on your premiums.  These factors can help you understand your rates, and better yet, how you might be able to reduce your premiums by making a few simple changes.

Age & Driving Experience

The harsh truth is that your age will always play a factor in determining your car insurance premiums.  While this could seem unfair, understand that your insurance provider bases their assessment on statistical and historical facts.  So even though you plan to be a safe young driver, your insurance company will charge you a higher premium because of your lack of driving experience.  As a general rule, driving experience and maturity mean fewer accidents and resulting claims.  Take comfort in the fact that older people who are new drivers will be subject to higher rates as well, there are just fewer of them.

How to Save:  Though you can’t change your age or years of driving experience, you can increase your overall driving experience right off the bat – and your insurance company will reward you for it.  By taking a driving course from an accredited driving school in your area and submitting your certificate of completion to your insurance provider, you can expect to see an immediate decrease in your premiums!

Gender

As a general rule, young male drivers cost more to insure than females of the same age.  Why?  The driving and claims history of younger male drivers shows that they have historically riskier driving habits, resulting in more claims with their insurance providers.

How to Save:  There’s no solution to saving on your insurance based on your gender, but young males will benefit from a more significant discount than their female counterparts when they reach the age of 25 – when claims statistics (and therefore premiums) start to level out.

Driving History

Your driving history is really the only tool that your insurance company has to assess your abilities behind the wheel, and part of why inexperience means higher risk, and therefore higher premiums.  This means that if you have a history of accidents and insurance claims, or you have a number of traffic tickets where you’ve been convicted, your insurance company sees you as a high risk driver – which automatically increases your insurance premiums dramatically.

How to Save:  You can’t change the past, but you can drive better in the future.  Tickets usually only affect your insurance rate for three years, and accidents are usually only six, so start driving better today to invest in lower premiums for the future – not to mention in your own safety.  Slow down and obey traffic laws, and your insurance company will reward you with lower premiums in the future.

Your Vehicle

The make, model and year of your vehicle will ultimately affect your insurance rates.  This, contrary to popular belief, does not stem from colour or the number of doors, but rather the claims history and average repair cost of the vehicle – not to mention its popularity with thieves.

How to Save:  You’ve invested in your vehicle, and changing your ride isn’t necessarily a short term option – but, if you’re looking at buying a new (or new to you) vehicle, you can make an informed decision.  Before you buy, get a few auto insurance quotes and make sure that you can afford the premiums on the vehicle you’re choosing.

There are many other factors that help your insurance company to calculate the final cost of your insurance premiums.  These include (but aren’t limited to) your geographic location, mileage, coverage choices and deductibles.  By understanding the factors above you can start to work towards saving – even if you’re not changing your policy today.  When you understand how you can influence your premiums, looking for cheaper car insurance becomes an easier task.  Start by getting a few quotes online today.