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What determines auto insurance rates?

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Determining how much is car insurance can be a hard question to answer. The truth is that the actual amount that a person pays for his or her auto insurance can vary a lot. In some cases, a person will pay as little as $75 a month for their insurance, while other people can pay hundreds of dollars a month for a similar policy. How much is car insurance is determined by a multitude of factors that can vary from company to company.
There can literally be thousands of different factors that can determine a person’s auto insurance premiums. The main factor that seems to determine car insurance rates, however, is a person’s driving history. Generally speaking, someone who has never been at fault in an auto accident will pay a lot less for his or her car insurance than someone who has been at fault in an accident. It surprises many people to learn exactly how much one accident can increase their car insurance rates.

There are, of course, many other factors that will affect how much a person is charged for his or her auto insurance. After a person’s driving history for at least the past three years has been considered, the next factors that are considered are the age and gender of the person shopping for insurance. Using the formulas that most insurance companies use, men will generally pay more for their car insurance than women will. The reason for this is that statistics show that they tend to cause accidents with greater amounts of damage than women typically are.
Age can also play an important role in determining your car insurance premium. In general, younger drivers are at fault in more auto accidents than older drivers. It has also been shown that the elderly are the next most likely group after young people to be at fault in an accident. Because of these statistics, people on the opposite sides of the age spectrum will tend to pay more than those in the middle.

Other factors can also help to determine a person’s car insurance premiums. People who live in a high crime area and those who usually park their car outside at night will usually pay more for comprehensive car insurance policies than those who live in safer areas of park their cars in garages.

Rates are also dependent on the value of the car and how much insurance a person wants. People with small deductibles and expensive vehicle will pay more than people with cheap cars and large deductibles.



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