Key Variables That Can Impact Your Auto Insurance Premiums

Searching for auto insurance coverage may be difficult at times because several variables impact premiums, from your car type to your driving history and the types of coverages you need. As you look over your finances, you may consider cutting some coverage off your policy to lower your auto insurance premiums. Perhaps you are looking for a few ways to lower your premiums. However, it’s recommended that you weigh all of the factors before making a decision.

Here are a few key factors that might affect your auto insurance premiums:

  • The Type of Car You Have

High-end luxury cars or faster cars cost more to insure because they are considered high-risk vehicles. If your luxury vehicle gets stolen or damaged, finding replacement parts can be complicated. If you drive a fast car, that increases your chances of being involved in an auto accident.

You can offset these potential costs by qualifying for a discount. You may qualify for a discount if you install enhanced safety features on your vehicle, lowering your chances of being involved in an accident. You may also get a discount if you bundle your auto insurance coverage and home or renters coverage together. If you are a student, you may qualify for a discount by maintaining good grades.

  • Your Driving Record

Your driving history plays a significant role in determining your auto insurance premium. If you have been in multiple auto accidents, you will have to pay more for auto insurance. If you have a clean driving record with only a minor violation or ticket, your premium will be inexpensive. You’ll also have to pay a high premium if you’re a new driver and have never purchased coverage before.

Insurance companies will also assess how frequently you drive your car. If you drive your car every day, your rates will be higher than someone who only uses their vehicle occasionally. The more miles you put on your vehicle, the more likely you will be involved in a collision. Therefore, frequent vehicle usage may increase your premium.

  • Policy Limits and Deductibles

Your policy limit is the maximum amount your insurer will pay for a covered loss. Each type of coverage in an auto insurance policy has its limit. You can adjust the policy limit as your needs change over time. Your deductible outlines the amount of money you are responsible for paying towards a loss before your insurer takes over the balance. If you opt for a high deductible, your premium lowers. However, you are agreeing to take on significant financial risk if your vehicle is totaled.

  • The Amount of Coverage You Need

In most states, you are legally required to add liability coverage to your auto insurance policy. You can add collision coverage, which takes care of any necessary repairs if your vehicle is damaged. Comprehensive coverage protects your vehicle if it is damaged by a natural disaster or stolen. While collision and comprehensive coverages are standard, you can also add extra coverage, such as emergency towing, to your policy.

Consult with ISU-Wissink Agency

Your auto insurance premiums may increase or decrease depending on your existing and evolving needs. It’s recommended that you shop around and assess multiple quotes before finalizing a policy. If you have any questions about your auto insurance policy, contact our team here at ISU-Wissink Agency.