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<figure class="wp-block-image size-large"><img src="http://smartinsurance.tips/wp-content/uploads/2021/05/My-Post-20-1024x536.png" alt="" class="wp-image-1618"/><figcaption>Many factors help determine the cost of car insurance.</figcaption></figure>
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<h3 id="mntl-sc-block-callout-heading_1-0">Key Takeaways</h3>
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<ul><li>When it comes to paying for car insurance, your insurance company uses several factors to decide how much to charge you.</li><li>The first factor is your vehicle, including the car's value, make and model, safety features, and more.</li><li>The second factor is who you are as a driver, including your age and driving history.</li><li>The third factor is how the insurance company operates its business, including its profitability and any applicable state laws.</li></ul>
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<h2 id="mntl-sc-block_2-0-3">Vehicle Factors</h2>
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<p id="mntl-sc-block_1-0-2">Car insurance companies collect information on your vehicle to determine how much you need to pay for insurance. They may use your vehicle identification number (VIN) to access information, and they'll ask you for information as well. Here are the vehicle factors that might determine your costs.</p>
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<ul><li><strong>Year:</strong> The year of your vehicle affects your insurance rate. New vehicles can be more expensive to insure because insurance companies base your rate on the car's value. Some insurance companies offer new vehicle discounts, though.</li><li><strong>Make and model:</strong> The make and model of your vehicle also influence the cost of your insurance. A luxury sports car will typically cost more to insure than a minivan. This is because sports cars are typically driven at higher speeds, making drivers more prone to accidents.</li><li>Vehicle safety features: Insurance companies offer discounts for safety features like airbags because they are proven to protect drivers and passengers.</li><li><strong>Car alarm: </strong>Most car insurance companies offer a discount for car alarms or other anti-theft devices.</li><li><strong>Number of vehicles you insure:</strong> Insuring more than one vehicle on your policy will typically get you a multi-car discount. The discount will apply to each vehicle, but it doesn't increase as you add more vehicles to the policy. If you get a 10% discount for insuring multiple vehicles, it will stay 10% whether you have two or three insured vehicles.</li></ul>
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<h2 id="mntl-sc-block_2-0-8">Driver Factors</h2>
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<p id="mntl-sc-block_1-0-4">Insurance companies also look at your personal information. They compare it with statistical data to decide on your premiums. Here are some of the personal factors they consider.</p>
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<ul><li><strong>Age:</strong> Young, inexperienced drivers are charged higher rates than older drivers. Rates typically start to drop for young adult drivers at age 25. Rates may increase for adults aged 70 or older due to slower reaction times and a higher likelihood of needing medical care after an accident.</li><li><strong>Driving record: </strong>Insurance companies review your driving record to determine how risky it is to insure you. If you have a history of accidents or traffic violations, you'll be charged a higher rate for your insurance.</li><li><strong>Number of drivers:</strong> Adding another driver to your car insurance will affect your price. Adding a young driver to your policy will increase your rates even more. Having more drivers than vehicles can be a good thing because the extra drivers can be listed as occasional drivers instead of a principal driver, and it costs less to insure occasional drivers.</li><li><strong>Credit score:</strong> Unless you live in a state where the practice is banned, your credit score will also influence your insurance rate. A higher credit score typically means a lower insurance rate.</li><li><strong>Homeownership: </strong>Most insurance carriers offer a homeowner discount and a multi-policy discount as long as you insure both policies with the same carrier.</li><li><strong>Where you live: </strong>Your location affects your car insurance rates. If you live in an area with high claims or high theft, your insurance rates will be higher. If you live in a rural area, you may pay more because of a high deer accident volume, for example.</li><li><strong>Grades:</strong> Insurance costs more for teen drivers. Insurance companies may offset that by offering discounts for getting good grades.9 Getting good grades shows a high level of responsibility, which may translate to safer driving.</li></ul>
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<h2 id="mntl-sc-block_2-0-13">Insurance Company Factors</h2>
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<p id="mntl-sc-block_1-0-6">The cost of insurance is also affected by how the insurance company operates its business. Is the company privately held or public? How many employees does it have? How much are the employees paid? And the biggest factor, how much money has been paid out in claims? Here are a few ways your insurance company can impact your claims.</p>
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<ul id="mntl-sc-block_1-0-7"><li><strong>Profitability</strong>: Every insurance company is striving to be profitable. A company's bottom line is an important factor when it comes to your rates. Many factors affect profitability, including natural disasters, company investments, other lines of business, and underwriting.</li><li><strong>Payment plans</strong>: Insurance companies offer different payment plans. Some offer discounts for paying annually or semiannually. Some companies may also offer discounts if you make automatic payments.</li><li><strong>Length of time insured</strong>: As an extra incentive to keep your business, many insurance companies offer lower rates to clients who have been with them for a long time. In addition to loyalty discounts, they may also offer credits toward your deductible for each policy period you don't make a claim, which can also save you money.</li><li><strong>State laws</strong>: Insurance companies have to abide by the state laws in which you live. You must purchase a policy that meets your state's minimum requirements. Some states also have additional fees that can increase your premiums.</li></ul>
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<p>To read the full article,<a href="https://www.thebalance.com/what-affects-the-cost-of-car-insurance-527480"> click here</a>.</p>
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