Factors That Impact Your Price for Car Insurance

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Do you know what your car insurance premium is based on?  You may think that the price that you’re paying is based on a profit margin required by a large insurance company that’s remotely interested in you or your safety but just the opposite is true.  The amount of your premium is determined by using a formula that includes a number of factors from your individual information.  An insurance company evaluates how much of a risk you’ll be based on some very important criteria that you need to know about.  In order to keep your personal finances under control, you should plan for adequate cover to protect you, your assets, and your investment in a good car.

Age Means Experience

In almost every aspect of life, experience makes a big difference; insurance is no different.  Younger drivers have higher premiums than their older counterparts because of the experience factor; older drivers can make more reasonable and practical decisions quickly since they have a great deal of experience behind the wheel of a motorcar.  Once a driver reaches 25 years of age, they can expect the price that they pay for car insurance to decrease; they will have also obtained a lot of experience which enables them to act more responsibly in an accident.

Gender Makes a Difference

If you’re a male, you probably take more risks, express your aggression behind the wheel more often, and demonstrate more rule-breaking behaviour than females.  For these reasons, insurance cover for men is usually higher than for women; however, after the age of thirty rates become more comparable.  Men who are married pose less of a risk as well so that is another factor that can figure into your premium.

Education is an Indicator of Good Driving

It’s also interesting to note that your level of education can play an important role in determining your rate of insurance.  If you’re well-educated and employed gainfully, you show a willingness to work diligently to reach a goal; this is indicative of maturity and can impact the rate of your car insurance as well.  Educated, employed individuals show higher levels of responsibility than drivers who have low incomes and are less-educated.

Your History Follows You

If you have a lot of speeding tickets or have been involved in a multitude of accidents it goes without saying that your premiums are going to be higher than they would otherwise be.  If you’ve caused accidents in the past, your insurance company believes that you have a higher risk than other drivers of causing them in the future so your rates will be higher.  One of the ways that you can determine what your cost for car insurance would be is to use the Santam car calculator to determine the worth of your vehicle and the amount of insurance that you would need to adequately insure it.  This simple step can help you to budget the right amount for car insurance so that you’ll be protected no matter what your age or station in life.

There are many factors that impact your cost of car insurance and by controlling the ones that you can, you’ll have lower premiums that fit your budget easily.