How to Calculate Vehicle Insurance
Car insurance is mandatory in most states. You need to carry a minimum of a liability policy in order to meet state requirements. When you are shopping for auto insurance, you should be aware that your rates are calculated by a number of factors, such as your driving record, type of policy and deductible amount.
- Get a copy of your driving record. One of the biggest factors used to calculate the amount of your auto insurance is your past driving record. If you have numerous accidents or tickets that involve moving violations, expect to pay higher rates. The more incidents you have on your driving record, the more of a risk you are to the insurance company, and it will charge you according to these risks.
- Decide on an affordable deductible. The amount of your deductible is also calculated into your insurance rates. Many minor fender benders do not cost over $500 to repair. For this reason, if you choose a $500 deductible, your rates will be lower than if you choose a low deductible. The higher the deductible, the lower your monthly insurance payments will be.
- Understand how insurance companies view responsibility. When your rates are calculated, your age and marital status are both taken into consideration in order to determine the risk that you present to the insurance company. Married people are generally more responsible and, therefore, are calculated as a lower risk. Your age also affects your rates. The older you are the better your rates will be; when you are young, your rates are higher because you are calculated as a higher risk due to inexperience behind the wheel.
- Think about your car. Sports cars are often charged a higher insurance rates compared to family sedans or minivans. The topout speed of the car that you drive is considered when determining rates. Another factor that is calculated is whether your car is a stick shift or an automatic transmission. A manual transmission receives lower rates than an automatic transmission.