Drivers generally don't want to pay more than they need to for car insurance. Before you choose a combination of coverage and a premium, though, it's a good idea to understand which factors will affect your premium.
Deductible
The simplest factor is the deductible. A deductible is an amount the car's owner has to pay out of pocket if there's an accident. Higher deductibles lead to lower premiums. The reason is that a high deductible reduces the odds that you'll file a claim because the damage has to clear that amount before it's even worth filing.
Your insurer wins because they have less risk exposure. The question of whether it's a win for you depends on how much you can afford a high deductible. If you don't have $1,000 free to use at all times, you might want to pay a higher premium to get a lower deductible. Conversely, someone who has tens of thousands of dollars saved would probably be pretty comfortable with a higher deductible.
History
A car insurance agent will also look at your driving history when they provide a quote. Unsurprisingly, when an auto insurance broker talks to someone who has had multiple accidents or hasn't been driving very long, they're going to quote a higher premium.
Vehicle Value
An auto insurance agent also has to consider the value of the vehicle. There is a huge difference between insuring a heavy-duty pick-up that just rolled off the factory line versus a 20-year-old Honda Civic, for example. If the driver ends up in an accident, repairing or replacing the truck is going to be more expensive. Even if the driver has an excellent history, they're going to pay more to insure a more expensive vehicle.
Locality
Where you live also affects your insurance rates. A car insurance broker will usually offer a lower premium if you live in an area with fewer accidents and close to no vehicle thefts, for example. Conversely, someone who's driving to work through the busiest streets of a major city is going to pay more because the insurer sees more risk in the vehicle.
Use Case
A car insurance broker always asks how many miles you drive per year. This reflects your use case. If you're driving the vehicle 200 miles a day on business, that represents a riskier use case than if you take your car to the store a couple of times per week.
Contact a local auto insurance agent to learn more.
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