As many people around the country shop for auto insurance, they often run into quite a bit of cost-related jargon—premiums, risks, or liability. But what does it all mean, and how does it affect the cost? Thankfully, Farm Bureau of Archdale-Campbell Agency, an insurance provider in Guilford County, NC, is here to help answer this question.
What Affects the Cost of Auto Insurance?
Your insurance premium refers to the monthly or yearly payments you make to your company. The company will determine how much a premium costs based on a variety of factors, which include the driver’s history, type of coverage in a policy, and chances of a claim occurring. For example, if a driver has a history of accidents, fender benders, and even tickets, the company is more likely to charge a higher premium.
Another factor that determines the cost is the amount of risk the driver is willing to accept. This is in the form of a deductible, a predetermined amount of money an individual must pay before the insurance begins covering expenses. If an accident occurs, and the driver’s vehicle takes on $1,000 worth of damage, but the driver holds a policy with a $500 deductible, then they must pay that $500 before the company covers the rest. If a driver is willing to take on more risk with a higher deductible, then they can often receive a lower premium.
3. Complete Coverage
With complete coverage and additional options, drivers are more likely to have a higher cost for their insurance. While some might choose to not receive these options, others find them beneficial and worth the money. For instance, some people want to pay a small monthly fee for guaranteed roadside assistance. Should they break down on a trip or get a flat tire, the insurance company will dispatch a tow truck to help.
If you’re looking for the best auto insurance rates, turn to Farm Bureau of Archdale-Campbell Agency. With their personalized approach, they offer the rates and options you need at every stage of your life. If you would like to learn more about their policies, reach out to a trusted insurance agent at (336) 434-6550 or visit their website.