Calculating Auto Insurance Rates
Insurance companies use a complex formula in calculating premiums. They usually assess your risks when underwriting your policy using a risk rating system. This system helps the insurer assess risks so they can determine your premiums. The most influential factor of your rate is the frequency of claims. The more claims you make, the higher your premiums are. Other factors include:
- Driving record
- Accidents and violations
- Driving habits
- Your home address
- Civil status
- Your previous coverage
Assessing your Financial Situation
Everyone is unique and we all need insurance for our cars. If you fall under the low-income bracket and you have an older car that isn’t financed, getting a higher deductible and a lower monthly premium would be a wise choice. But if you make a lot of money and you have a newer financed or leased car, you may benefit from a lower deductible, higher policy limits, and higher premium.
The type of ownership (financed, leased, or outright ownership) you have on your vehicle may affect your rates. Leased and financed vehicles often have full coverage, thereby costing more. But if you own your car outright, you will benefit better from having higher deductibles.
Getting Gap Coverage
For those who are looking for car insurance for their financed or leased car, consider getting gap coverage. If your car got totaled in an accident, the insurer typically pays only for the “market price” of your vehicle and not for the purchase price. Usually, this is lesser than the amount owed on the car. Gap coverage covers the difference in value.
Chances are, you are eligible for special discounts on your insurance. So don’t hesitate to ask your agents about it. Common discounts may include the following:
- Bundling of policies
- Getting insurance for two or more cars
- Safe driver
- Being married
- Owning a home
- College graduate
- Military veteran
Don’t just consider one insurer when shopping for auto insurance. Always take the time to see other policies being offered by a different insurer.
You don’t have to consume time searching for carriers online. Here at Vianca Insurance, we have a list of insurers that you can choose from. We can work together as we customize an auto insurance policy that would suit your needs. Get a free quote from us now. Call us at (619) 799-9443 or visit us at our office today.