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Essay Sample on Factors Affecting Car Insurance

Factors Affecting Car Insurance

When you own a car, it is always a requirement that you purchase car insurance. However, shopping for car insurance can be challenging at times considering the aspects that you have to give precedence to. It may look like an easy activity but there are several factors that impact car insurance, which you should be very keen on when shopping to avoid getting a raw deal. You may not easily realize it but in the long run, you may find out that the car insurance you got is not what you expected.

The factors that affect car insurance can be grouped into three units that comprise of demographic factors, car-related factors and your personal driving habits. With regards to demographic factors, it should be noted that your gender and age can influence the rate for your car’s insurance. For instance, young men tend to be charged higher car insurance rates compared to young women. On the other hand, older men usually incur lower rates than their female counterparts.

Even though most people usually do not pay much attention to it, credit score can also affect car insurance. Today, most insurance companies will have to put your credit score into consideration when determining the rate of premium for your car insurance. The truth is that there is no specific relationship between your credit score and rate of car insurance but generally, lower credit scores can earn you higher insurance premiums than expected.

The car that you drive has a significant impact on the rate of premium that you will be asked to pay, since there are certain cars that lack safety features to prevent accidents, cost more in terms of repair or are even more likely to get stolen. When you drive an expensive car, the insurance rates are expected to be higher compared to a common model that is owned by a majority of people.

The age of the car that you need to insure will also impact the overall rate of the car insurance. Even though the cost of repairing an older car can be almost similar to a newer one, an older car is likely to experience a lot of damage in the event of an accident. In fact, the cost of repairing an older car can at times even exceed its total worth making it even pointless to spend money on it instead of making a replacement with a new one. For a newer car, you should expect to pay a higher premium for the insurance cover.

While all the above can have an impact on your car insurance, it is also very important to consider your driving history. If you have been involved in accidents, obtained traffic tickets or even made auto insurance claims previously, most insurance companies will reason that you are likely to make another claim compared to a driver with a clean record. In fact, there are even some insurance companies that can refuse to insure your car if you have a very bad driving history.

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