You would think computing an auto insurance premium is a straightforward process. But there are actually a lot of factors involved. The information you provide is only a part of it. Auto insurance companies rely on sound statistical data compiled and tested over decades to determine what kind of risk a particular driver may be. After all, insurance is all about risk, and few understand how to assess risk better that insurers.
In California, auto insurance premiums are based on various “rating factors,” such as marital status, gender, age, vehicle type, garaged or not, etc. However, the top three critical rating factors are 1) Number of miles driven annually, 2) Driver’s safety record, and 3) Years of driving experience.
Of course, all these factors are weighted differently, with some affecting your premium more than others. This information helps the insurance company paint a picture of what kind of driver you may be and how likely you are to file a claim.
Of course, there are ways to save on your auto insurance premium. Obviously, maintaining a clean driving record and cutting down on the number of miles you drive is helpful. There is nothing you can do about your age, gender or marital status. However, there are other things you can do to save money.
The type of vehicle you drive can also ease up on that premium dollar. A non-sporty model with an excellent safety record is a good thing. Ask about alumni and professional association discounts. Take a driver safety class. Increase your deductibles.
Why not talk with your insurance professional about different coverage options. Arrange a review of your auto policy, as well as the rest of your insurance, and see what you can do to save some money and boost your coverage.