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If you’re shopping around for auto insurance, it may be hard to know if the quotes you’re given are fair or not. By understanding the factors that determine your auto insurance policy premiums, you’ll be better equipped to make choices that reduce your driving risk and select a policy that will protect you best.

Are You Paying Too Much for Auto Insurance?

1. Demographic

Your age, gender, and marital status affect your premiums. Men are more likely to drive recklessly and get into accidents, so their rates are typically higher. Insurance companies use statistics based on demographics to determine who’s more at risk.

2. Your Vehicle’s Value

Your rate will depend on the calculated chance of you needing vehicle repairs or replacements and the cost of those potential claims.

Sports cars cost more to insure than minivans since they’re more likely to be involved in accidents and theft. Higher-trim levels and upgraded features also increase the insurance company’s liability. Vehicles with higher safety ratings may have lower rates unless those features come from expensive, damageable components.

Your rate will also depend on whether you own or lease your vehicle. Having a loan typically increases the amount of coverage you are required to have, which will raise your premiums.

3. Driving Record

auto insuranceYour driving history — including years you’ve had a driver’s license and the miles you drive daily — can impact your rate. More years of experience will lower your rate, but more frequent driving and a higher likelihood of an incident will raise it.

Any history of accidents and auto insurance claims will typically raise your premiums. This also applies to traffic violations, especially if you have any DWIs.

4. Homeownership

Bundling your home and auto insurance together often lowers your rate and simplifies claims processing since you only have to deal with one agency.

The safety and crime history of your neighborhood can indicate the likelihood of you filing a claim for damage or theft. Insurance companies may also take into account the population density and parking options in your area.

5. Policy Coverage

Choosing a policy with a higher deductible will lower your monthly premium but raise the amount you would pay if you end up in an accident.

Your amount of coverage will also affect your rate. Full coverage can end up costing over twice as much as minimum liability coverage if you never file a claim.

 

Not sure how much coverage you need? Find the answers to all your auto insurance needs at Reid Insurance Group in Lovington, NM. They are an independent agency, so they’ll work with multiple insurance companies to find you the best plan for your needs. Call (575) 396-3645 with any questions or visit their website for more information about their services.
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