Car insurance is something you need to drive your car on the road, but this doesn't mean you have to pay a lot of money in order to be covered. Understanding how auto insurance works will help you to both cover your vehicle and get good rates that you are satisfied with. Therefore, you want to continue reading to learn more about both insurance and rates.
How car insurance works
Car owners pay the car insurance companies to give them insurance coverage. While the policies differ according to what company a person chooses to go with and what the driver's needs in coverage are, they all offer at least the minimum insurance coverage required in the state the driver lives in.
The regions that have a lot of risks like higher incidences of accidents and stolen vehicles will generally have higher rates than regions where these statistics are low. It is like this because the insurance companies would be taking a loss if they offered lower rates while continuing to take on those large numbers of claims.
Why the car and its features matter to your rates
Statistical data is used in order to determine how high of a risk certain types of cars are with regards to things like the chances of being involved in an accident or being stolen. A flashy sports car designed to go fast is at both an increased risk of being involved in an accident and of being stolen. A family car will tend to be less at risk of both of these things. Therefore, the rates will be higher for that sports car than for the family car.
Things added on to a car that decrease some risks, such as the seriousness or chances of accidents or the chances of the car being stolen can help to decrease the rates a person pays out for their insurance policy. Things like added safety features such as rearview cameras can lower rates. Also, having a car alarm system installed can help to lower rates.
Why your driving habits can matter to your rates
Your age will impact your rates because the insurance companies realize that more experienced drivers will be at less of an accident risk than less-experienced, younger drivers. Also, your driving record matters because things like previous accidents and tickets for speeding will be red flags for the insurance companies.
Where you park your car even matters, because a garaged car is less at risk of being stolen or vandalized. Now that you have a better understanding of how insurance works, you will know some things you can do to lower your rates and you will understand why you are getting the quotes you are getting.