April 16, 2024
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You might have thoughts on why car insurance are do expensive? If you should sign up for one? If you can afford a car insurance policy?

The cost of your car insurance might be on a high side due to some major reasons that influence the rate of car premium paid. There are various factors that can influence the amount of premium to be paid by car owners and these factors may vary depending on the car owners and even the insurance companies. Insurance companies can also influence an increase in car insurance premium if they find anything that makes your car highly prone to risk or accidents.

What is Car Insurance?

Car Insurance is an insurance policy where an agreement is made between the insurer( insurance company) and the insured (car owner) to provide protection in the case of accident or theft and the insured is expected to pay a sum of money known as PREMIUM. It is mainly a form of protection for your car when situations beyond your control. It could cover car repairs, damages, medical expenses and injuries caused to a third party.

Why car insurance is important

Having a car insurance policy in place is necessary as it protects your car in cases of theft or accidents. It covers all your damages and losses and gives you relief when unexpected events happen. You can decide to sign up for a car insurance policy based on the following reasons:

  • In various countries and states there are laws guiding insurance and you probably would have to sign up for a car insurance policy if it is required by the law of your country.
  • It protects you in an event of theft or accident. Whenever you are in an accident cause by either you or a third party there is an assurance that your car insurance covers the losses and damages the might have occurred.
  • It covers you from accident caused by you. In a scenario where you might have hit a car due to negligence or unknowingly your insurance policy covers the damage done by you to the other driver or to a third party.
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Factors that influence increase in car insurance

You might be wondering why a car insurance premium varies from that of another person it could be due to varying factors like age, gender, driving history and other factors that would be explained in this article.

  • Age: Age Is an important factor that is considered when insurance companies decide on the car insurance premium to be paid by the insured. Young drivers are on the receiving end of a high car insurance policy than older drivers. There is a believe that young drivers drive carelessly and are more prone to accidents and risk than older driver which makes them more difficult to insure. Insurance companies charge younger drivers an expensive car insurance rate than they would charge any other age group.
  • Gender: Most insurance companies are much likely to charge an high car insurance rate from the male drivers than their female counterpart. This happens because a female driver would drive with caution and more responsible than a male driver would. The male gender attracts an high car insurance rate because insurance companies feel they would pay more in a case of an accident.
  • Driving History: Your driving history whether good or bad tells a lot about how high or low your risk level is. Insurance companies do a thorough research on past records of your driving history to foretell your likely risk level and how much premium you should be charged. A driver with a bad driving history would pay more than one who maintains a good driving history.
  • Credit Score Profile: A drivers’ credit profile influences their insurance rate. It is claimed that drivers with an unhealthy credit score profile charge more insurance claims than those with an healthy credit profile.
  • Years of driving experience: The more driving experience a car owner has the more he/she is less likely to make mistakes that leads to risk and then filing of insurance claim. Insurance companies consider your years of driving experience before determining how much to charge you for your car insurance rate or premium.
  • Coverage options: Your car insurance policy might not only cover your car repairs but it might cover protection for a third party in the case of accidents. The number of coverage your car insurance policy covers the more expensive your car insurance premium would be.
  • Car type: The type and brand of car you want to insure can have an influence on the amount you pay as premium. Insurance companies need to check they type of car you use, the amount it would cost to make repairs or get a new one in the event of an accident before determining the amount that you would pay. They do a thorough inspection of the car type, car size, engine cost and repair cost and how prone it is to theft.
  • Insurance Discount Options: Depending on your insurance company and location you might be offered a discount which plays a part in deciding your car insurance rate. You might be offered a discount option if you have a good driving record and experience as well as paying your insurance premium as at when due.
  • Location: Insurance companies charge more car insurance premium depending on where you live. Your location influences the amount you would pay as car premium whether it would be high or affordable.
  • Insurance company: Insurance companies determines how high your insurance rate would be. If you have a car insurance policy with an expensive insurance company your insurance rate would be definitely be on a high side.
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How To Get A Less Expensive Car Insurance Rate

Getting an affordable car insurance premium that suits you is good so it helps you save that extra money that would be spent on an expensive car insurance. As a young driver you can get to pay a lower car insurance premium by sharing a car insurance policy with an older family member as this would reduce your total car insurance rate. Also you should shop around for offers that could lower your insurance rate. You can also get a reduction on your car insurance premium by having control over what your car insurance policy covers. Switching your car type to a less expensive one can influence your car insurance rate. An healthy credit score profile would also help you get a lower car insurance premium.

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Conclusion

Having a car insurance policy is necessary and gives you a sense of relief but knowing what influences an increase in your car insurance rate is much more important so you know what helps you get an affordable car insurance rate that suits you.

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