Insurance companies use many factors to decide what price to charge for auto insurance. The driver requesting the quote has no control over some of these, such as his age, where he lives, and level of driving experience. There are, however, other factors that are often used when calculating a car insurance premium.
Cheaper Auto Insurance as a Listed Driver
Rather than take out insurance as an individual, it is sometimes less costly to become a listed driver on the policy of another person. This is often the case for a young, inexperienced driver trying to get insurance for the first time. There is usually a contractual requirement that the policy holder is also the vehicle owner. Care must also be taken to abide by any other conditions in the policy
Avoid Penalty and Demerit Points to Get Cheaper Auto Insurance
In most states, the motor vehicles department has some form of "point" system that is used to track driver records. According to Insurance.com, the number of points given for each infringement varies, but generally goes from one point for a parking violation, up to four points for a drink driving conviction. Insurance companies have access to these records, and they check the record of those seeking insurance. Some companies will refuse to insure some drivers based on their record, and even a few points can affect the auto insurance premium.
Cheaper Auto Insurance from a No Claims Bonus
Insurance companies generally look at a driver's record for the past three to five years. For every year that a driver has been insured, and has not claimed, the premium is reduced. This is worth bearing in mind when involved in a minor "at fault" accident. For example, if a driver scratches his own car, causing $500 damage, it may be worthwhile paying for the repair himself, as loss of the "No Claims Bonus" could be more expensive.
Continuity of Cover Gives Cheaper Auto Insurance
Unbroken insurance cover will lead to reduced auto insurance costs. There are times when no car insurance is needed, such as moving abroad. Auto insurance companies invariably charge more to drivers who have not had insurance in the previous year. For this reason, it is worth comparing what the costs are to continue a policy, even when none is needed, to what the extra cost is to resume the policy after a year.
How Auto Make and Model Affect Insurance Cost
This is one of the most significant factors used to decide the cost of an auto insurance premium. It is significant for two reasons. The first is that certain cars often attract drivers that are fascinated by speed and so have a higher than normal rate of accidents. The other reason is that these cars are sought after by thieves, who either steal them to order, or drive them until they crash.
Cheaper Auto Insurance Cover by Reduced Cover Level
Auto insurance is needed primarily to make sure that the insured driver can pay for any injuries that he causes to others. There is an additional optional element to auto insurance that covers the driver for damage to his own car. The two types of insurance are known as "Third Party Only" insurance and "Fully Comprehensive" insurance. "Third Party Only" insurance is cheaper, especially when the value of the car to be insured is low.
Other Factors that Affect Auto Insurance
Other factors that affect auto insurance costs are whether other drivers are insured on the policy, deductibles (how much of the cost of an accident the insured driver will pay himself), the value of the car insured, whether the car can be classed as antique or vintage, and some auto insurance companies give discounts to tea-totallers. Some auto insurance companies only deal directly with the customer and do not use brokers, so shopping around for a good deal is necessary.
Minimize Auto Insurance Costs
Auto insurance is expensive, but drivers have at least 10 factors within their control that can be used to minimise the cost. For the cheapest insurance, the best way is to drive safely, and shop around.
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