It is a legal requirement in almost all the nations that all vehicles running on the roads must have valid insurance covers.
All car owners are therefore compelled to have an insurance cover for their vehicles. The costs of these covers vary as a result of many factors, but most people are unaware of these factors hence they end up paying very high insurance prices. It is a good idea that one should know the factors that determine the cost of the insurance so they can see the areas to improve on so as to bring the costs down. Discussed below are some of the factors that affect these prices.
Rules and Regulations
The very first factor that determines car insurance prices is the rules and regulations of a given country or state. In most cases, the government or the relevant authority will give guidelines on the amount that the vehicle owners are expected to pay. With these set rules, insurance providers are bound to abide by the laws. Now, different states or different regions will have different insurance rates and as a result, the overall prices charged by the insurance firms will vary greatly.
Demographics such as age, sex, marital status, and level of education are some of the factors that dictate the insurance prices in the present days. In some places, you will find that the teenager policy rates are very exorbitant for the simple reason that teenagers are less experienced and are prone to get involved in accidents more often as opposed to the older people who are more experienced and less prone to get involved in accidents because they are more careful. Other factors that are likely to raise the price of the insurance are your performance records. If you have a clean driving record, then you may be given lower prices, but if you have a past record of causing accidents, then again the rates will be relatively higher.
Car Parking and Safety
The place where you park your car can help to raise of lower the insurance prices. When you park your car in a secure garage which is always under lock and key, it will be perceived that your car is safe and less prone to theft hence the insurance rates might be lower. But if you leave your car outside, the rates will be high since the risk of it being stolen in such an insecure place are relatively high and so you will have to pay higher rates. The type of car also matters a lot. For instance, a sports car has higher chances of getting involved in an accident or even theft as compared to the sedans which are considered to be more secure and are not often stolen.
Uses of the Car
Things like the type of work you do with the car, the distances you travel and even the speeds under which you drive are normally considered when determining the car insurance prices. Not only these, but also how you drive and this can always be depicted by your driver’s permit. When you expose the car to long distances, high speeds and a large amount of work, then you will increase the risks of either the car breaking down or it getting involved in an accident. As a result, the rates of insurance will also go up.
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