The basic reason of the insurance premiums is due to the claims that one ought to make from the insurance companies based on risks that a car is entitled to face. The calculation of car insurance rates is based on predictions and probabilities on amount needed to settle for the risks or claims, the company’s capability and in mind the taxes that face the insurance industry. However, there are a number of factors put into consideration when the calculation of car insurance is of concern.
Location: Where you live pose, a great interest to the insurer since it will tell of the possibilities and kind of risks that are prone in that area. In case you live, in an area, that has a history of theft and with frequent car accidents then you will need to pay more as the premium rate.ge factors: it is quite difficult to tell of a reckless or careful driver especially if they all have driving licenses. Insurance companies however have a common trend that they take young drivers to cause accidents more than the older and it is therefore the reason they charge more to drivers who are between the ages of 18 to 27 years hence facing the highest premiums. A reduction of the high premium rates will only come from conducting careful driving hence attaining good records and a consideration is guaranteed in future.
The car use: how you use your car will determine the premium rates depending on the many times your car spends on the road. If your car spends too much time on the road for reasons of nature of your work or the distances you have to cover due to various reasons then the premium rates will be higher.
The type of car: Many factors will contribute to this since cars differ in make and model. The more the car is expensive means that it is more expensive to maintain and claim in case of any risk hence higher premium rates. The power of your car depends on the engine and in case it is a fast and powerful car, it is prone to accidents and its maintenance can be quite expensive. Owning a desirable car can also pose threats of theft, which makes owners of such cars insure their cars at a higher rate.
Driving history and records: good conduct on the road is key when it comes to insurance rates. Each driver has records despite attaining a driver’s license where they are required to maintain and follow traffic rules in case they need a reduction in the premium rates. For example, if one has bad records of recklessness and always-causing accidents, their car insurance rates are always on the high side since the insurer is always expecting claims. However, good drivers have a reduction of their rates with time and a bonus is given if no claim is made within a proposed time of the policy.
An additional driver: if you choose to add a driver to drive your car then the premium rates are bound to go higher. It even goes higher when you choose a very young driver could be your son or daughter who has just finished driving tests and attained a license. However, the rates will slightly lower if the added driver is a much older person.
Excess: if you choose to pay much on your excess fee, then the insurance rates will decrease.
It is wise noting that all insurance companies take the above factors differently therefore, it is better to shop around for the best insurers who will provide better rates.