Many factors affect the rate a driver pays for auto insurance. While some may be tempted to eliminate or reduce certain types of coverage to lower the monthly premium, it is essential for customers to consider the other factors affecting their rates. Below are several things that affect drivers’ auto insurance premiums.
Car Type
Some types of cars, such as exotics and sports cars, cost more to cover because they cost more to repair after an accident. However, if a driver chooses a reliable, modest vehicle with built-in security features, they may be able to get discounts when working with an Auto Insurance Agent in Chicago.
Driving Record
If a person has a spotty driving record, his or her auto insurance cost will be higher than a driver with a clean record. New drivers who have never had insurance before may also pay more because they represent an unknown level of risk.
Driving Habits and Lifestyle
Auto insurance companies look at how drivers use their vehicles when determining rates. Someone with a long commute may pay more than a person who only uses their vehicle for short trips because more time behind the wheel means additional risk.
Location
The place a person lives and parks their car may affect their monthly premium. Urban areas typically have higher accident, vandalism, and theft rates than rural towns, which means premiums are usually higher.
Coverage Type
The coverage a person chooses can affect the rate they pay. Most areas have minimum coverage requirements involving liability insurance. Optional coverage includes collision, comprehensive, under/uninsured motorist, and PIP (personal injury protection) insurance.
Deductibles and Limits
The limit is the top amount the policy will pay for a covered loss. Each coverage type has a separate limit, and the driver may be able to adjust it based on his or her needs. The more coverage a driver buys, the higher the premium will be. The deductible, or the amount the driver pays before coverage kicks in, can also affect the rate. Setting a higher deductible can help a driver save each month.
Auto insurance can be complex, and it’s often difficult to determine one’s needs. An Auto Insurance Agent in Chicago can help drivers find the right coverage, limits, and deductibles, as well as any available discounts. Find more information visit Illinois Automobile Insurance Agency.
