Why You Are Paying More in Insurance Premiums

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Have you been wondering why you pay more in car insurance premiums than your friends yet you own the same car? That’s because the insurance industry works in mysterious ways.

A number of factors are considered in calculating the amount of premium a policy holder is required to pay. These factors may favor you or work against you since the more risk you are considered to carry, the more you have to pay to cover it. You need to understand how insurance premiums work. So as you can see, your allegations that your insurer hates you are unfounded, you are just a risky person.

These are the factors that determine how much you pay in insurance premiums.

Personal profile

It may seem stereotypical but you age, gender, student/job status, and marital status play a role in deciding how much you pay in car insurance premiums.

A big number of single males aged below 25 get involved in car accidents and if you belong to this demographic you will have to pay more to cover the risk. Women within the same age get lower premiums because they are not prone to getting into accident as their male counterparts.

Single people in general are charged more because they are more likely to engage in risky behaviour compared to people in marital unions who presumably have something or someone to lose.

The insurance industry rewards you with discounts if you are a student with good grades.

Neighborhood

The location of your home also determines how high or low your insurance premium will be.

If you live in a neighborhood with high crime rated where you are likely to be carjacked or your car stolen, your insurer covers this by charging you a higher premium than your friend with the same car who lives in a safer neighborhood.

City dwellers also pay higher insurance premiums that rural or small town inhabitants.

You are also likely to be charged more if you live in the path of natural calamities like volcanic eruptions, floods and earthquakes.

Model and condition of your car

Generally, expensive cars have higher insurance premiums for the simple reason that it will be costlier to repair or replace the car than a cheap one. This can however be slightly offset when the safety features of the car are taken into consideration.

The condition of your car is also considered when calculating how much you are to pay in car insurance premiums. Creaky cars present a safety risk to both the driver and other road users and are required to pay more because of this. This is why you should have your car regularly serviced only by the best mechanics from the Best Auto Mechanic Schools. Maintain your car in perfect condition and you will get lower premiums.

Driving frequency

This is basically a calculation of probability. If you drive your car frequently over long distances then there is a higher possibility that you can get into an accident and make claims on the insurance company.

On the flipside, low mileage means low risk and therefore low premiums.

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