Monday, April 29, 2013

Calculating Insurance Rates

When you apply for a car insurance,the company weighs in some factors to decide what your premium should be. Here is an article by Bogdan Moisa that shows what goes into these calculations.

How Is Your Auto Insurance Rate Calculated?

Correctly predicting risks is essential for any insurance agency. If an insured suffers damages, in our case, because of a car accident, the company will have to cover the repair costs and the passengers' medical bills. An agency will try to reduce the cases where it has to pay up a benefit, or at least cover future possible expenses by increasing the premiums.

When determining you auto insurance policy's rates, a company will take into account a wide range of issues.

1. What are you driving? Since auto insurance concerns automobiles, the type and quality of your car matter a lot in determining the cost of your policy. A fast-sport car will cost a lot more to insure than a slow, but sturdy family car. Old vehicles will also get cheaper premiums, as long as they are in prefect working condition. New cars cost more to insure because they are expensive to repair or replace. So, if you are looking forward to buying a car, think of your auto insurance rates too when you make your pick!

2. How are you driving? Driving experience accounts for a high percentage of your auto insurance rates. Someone who has driven for a long time will get cheaper rates because it is unlikely for him or her to make a mistake and damage the car. On the other hand, a history of reckless driving and DUI will raise the costs.

3. Your finances. An insurance company will look into your finances so that they can make sure you will be able to pay the premiums. Having a good credit rating puts the agency at ease because they know you'll have the means to pay for your insurance.

4. Your lifestyle. Someone who drives safely will always get the better end of the deal. Your lifestyle can tell a company a lot about the way you drive. For example, agencies will consider any under 25 single male a liability. On the other hand, a married person will drive safely because they do not want to risk endangering their family, so they will get cheaper rates. Your education level and grades can also help reduce the cost of your auto insurance. Another reward for being a good student is getting cheaper auto insurance!

As you can see, there are many things that contribute to your insurance rates. It is important to know what issues count as you can use the information in your advantage and lower your policy's costs!

If you have just bought a new car or received your driving license, have a look at some auto insurance Texas quotes! Auto insurance is mandatory, so why not get the best rates? Visit http://texaslifeinsurancequote.net/ for the best offers!


Thank you Bogdan! That was a helpful article.

Nadav

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