You’re shopping for auto insurance for the first time and still navigating through some of the twists and turns. What does auto insurance “premium” mean? How do you get a quote that fits with the coverage you need? Why is your cost different from your parents? Your siblings? Your friends and co-workers?
The answers are fairly simple.
The auto premium is the amount you pay regularly (every month or every six months), for insurance coverage. When you pay the premium, your coverage is in effect.
How are your premiums calculated?
The more risk you pose, the more you will pay for insurance. Risk is determined using a handful of characteristics. Two of the prominent measurements are your age and where you live.
AGE – Young drivers pay more than older drivers. Premiums begin to drop when drivers reach 25. Then premiums start jumping back up when drivers are considered “senior” around age 60.
WHERE YOU LIVE – If you live in a what is considered a high crime area your premiums will be higher. If you live in high traffic areas your premiums will be higher.
YOUR CAR – The more expensive model of car you own, the higher the premium because they are more costly to repair or replace. The more safety features on your car (airbags, seatbelts, automatic braking, rear cameras) the bigger the discount on your premiums. You probably already have airbags and seat belts, but insurers will add discounts for other safety features, like electronic braking control.
WHAT CAUSES INCREASES IN YOUR PREMIUMS
- Car accidents that are your fault that lead to claims, especially severe damages
- Car moving violations (speeding, running traffic lights) that lead to traffic tickets
- Your age as it approaches 60 years, then drastically higher in your early 70s
- Letting your policy lapse or having your license revoked will cause a higher rate than if you have continuous coverage
- Overall upward swings in national or regional premiums from the insurance industry
WHAT CAUSES DECREASES IN YOUR PREMIUMS
- Each year you drive safely, accident and claim free
- Roughly ten years of experience (at around age 25) will see decreases
- Your credit score improving
- Your school grades improving
- Changing safety features in your car
- Moving to a safer area
When shopping for your insurance quote, have these things close at hand:
- your date of birth
- address where vehicle is usually parked overnight
- your driver’s license number
- your driving and insurance history
- the vehicle identification number (VIN) of the vehicle to be insured
If you are looking for more details about your auto premiums and quotes call contact our office:
J.M. Insurance & Financial
Our agency’s mission is to recommend coverage and policies meeting each individual need.