One of the biggest expenses regularly encountered by American consumers is car insurance. But most people miss some of the factors that are involved when these plans are being priced. When we are looking to save money and construct an auto insurance plan that is right for our needs, it is important to know what the insurance company is looking at when they are determining which rate to offer you. Your car and its related expenses make up one of the most important purchases in your life. Unfortunately, too many of us focus only on the car itself, and all of the bells and whistles that make up its features.
But the auto insurance plan you chose is just as important (if not more important) than any of these aspects, so it is critical that you understand the differences between the way your insurance company is looking at your policy because there might be other companies with plans that are just as comprehensive that are offered at much better rates. Monthly expenses tend to add up to much more than even some of the largest one-time purchases, so plan accordingly and get yourself educated on the factors involved when your policy is being priced.
Location
Insurance premiums are a cost that most Americans encounter but when determining rates, there is more involved than the car itself. There are always going to be different coverage options but one commonly overlooked factor is your location. “Your work and home location create an important element when auto insurance policies are priced,' said Jim Holm, industry analyst at Enhanced Insurance . ”Areas with fewer accidents and lower crime rates tend to be associated with cheaper insurance plans.” In part, this will depend on the on the type of coverage you want as not all drivers will be looking for theft insurance.
If you live in an area where there is a great deal of vandalism or car theft, it might make sense to take out the added insurance even though the costs will be higher. These extra costs will have to be weighed against the likelihood that something will actually happen to your car.
Safety Features
These days, most cars are outfitted with many attractive safety and security features. Many of these features will actually cut some of the cost from your monthly insurance bill because they can help to limit liabilities for the insurance company if there is a car accident. Add-ons like rearview cameras (for backing up) or side airbags might cost you most money when purchasing your car. But they help to increase safety and can prove to be money savers in the long run. Other features, like smart keys and car alarms, can also be helpful as there is a reduced risk that your items can be stolen (helpful in bringing down theft insurance).
Car Make and Model
Last, the car make and model will always be important as there are bigger costs involved and insurance companies tend to associated flashy cars with more reckless behavior. For example, it is unlikely you will see people speeding in a minivan. The person driving the Ferrari is much more likely to exhibit that short of behavior.
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