This Is How Your Premiums Are Calculated

By Author: Norris Rios
Total Articles: 572
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Having your car insured is mandatory for all who drive cars in most states of the US. It doesn't matter if you are an experienced professional driver or a rookie who's driving his first week, insurance requirements are the same for all people behind the wheel. And if you are caught without having proper insurance coverage, you risk facing a substantial fine, license suspension and even time in custody.

Calculating the exact amount of how much it will cost you to insure your car can be really tough as there are too many elements affecting the rate. However, there are ways to ease the task and you will learn them right here. With so many insurance companies offering their services both online and in real world, knowing these mechanisms will help finding the most advantageous offers you can save money with.

But before analyzing the mechanisms of insurance evaluation, lets first look at the legal requirements for driving a car (and having car insurance). In order to drive a car legally you have to be 17 years or older, carry a provisional or full driving license, and own a vehicle that corresponds to the categories ...
... indicated in the license.

Defining the amount of money to be paid for insurance coverage strongly depends on a set of factors. First of all, your age is a strong factor that influences your rates, as younger drivers are regarded to be more risk-taking than older ones. Your driving record is another variable that will heavily influence your rates, as the lack of serious tickets and accidents will keep your rates low. Other factors such as the car make and model, engine volume, top speed, safety features, as well as you claims history also play an important role in the overall amount of your premiums.

In order to better understand how these factors will affect your rates, spend some time experimenting with online car insurance quotes. There are numerous sites where you can find free online quotes. Just fill out the form by changing some of the key parameters and the car insurance quotes you will get in result will show you the weight of each factor in the overall rate.

And don't forget that different companies tend to evaluate their risks differently. This means that the car insurance quotes you get for a car from one company may differ a lot from quotes on the same car with another provider. This is because insurance companies use different parameters when evaluating their risks and have different claims statistics influencing the final rates. For example, one company may regard drivers aged 20-25 as very risky because this company has a lot of claims from this particular demographic group. While another company has more claims from older drivers and will charge younger drivers less. Use this to your won advantage and don't forget that shopping around always pays off.

Now that you know how your rates are calculated you will be able to better use these factors when looking to insure your car. Don't forget about the importance of information here, and try to learn as much as you can before signing an insurance policy.