It’s wise to shop around for car insurance and compare policy prices. The cost of covering your car, truck, or SUV can vary greatly, but why? To help clear this us, Aaron Insurance Agency of Dothan, Al, has listed factors that play a role in the cost of auto insurance.
What Factors into Car Insurance Prices?
1. Driving History
Neither the insurer nor the drivers they’re covering wants to be in an accident or receive a ticket. However, it is the job of the insurer to determine the likelihood of this happening. Drivers who have been in accidents or received tickets will receive higher quotes because they carry more risk. Based on their driving history, these drivers are more likely to file a claim than drivers who have never needed to.
The likelihood of an accident also has a lot to do with the vehicle’s location. Car insurance for drivers living in suburban towns will be lower than residents of a city. With more cars and people present in a city, there is a higher chance of a damages claim being filed.
Statistically, younger drivers are in more accidents than experienced drivers. This is why teenagers’ car insurance costs are high when they first get their license. When drivers reach their mid-twenties with a clean driving history, their insurance rate drops.
4. Cost of Replacement
If a claim needs to be made, how much the insurer needs to pay depends on the value of the car and the cost of repairs. For example, a mid-2000 Toyota Camry is a common car that has depreciated over time. If this car needs to be repaired or replaced, it will not come at a significant cost to the insurer. However, the cost of covering a new BMW will be significantly higher because of the high value and cost of repairs.
These examples are just scratching the surface of what factors into car insurance costs. For more information, feel free to visit the Aaron Insurance Agency website, or call them at (334) 712-0777.