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General Overview

Although you drive the exact same type of car that your neighbors do and purchase insurance quotes from the same company, the overall car insurance rates can be different for each of you. The total premium that you need to pay depends on numerous factors including your personal information, financial condition, and the company’s policies.Factors that Affect Car Insurance Rates

  1. Personal Profile

The personal profile may include age, where you live, types of car that you drive, car mileage, and driving record. All car insurance companies use the information concerning those factors to help to determine the overall premium. Age information is important based on the assumption that mature drivers have fewer accidents that the younger ones, especially teenagers. In other words, drivers who are 25 years old or more can purchase insurance quotes at cheaper rates than teenagers. Another important consideration is the place where you live or drive. Car insurance rates are generally expensive in urban areas simply because there are plenty of cars on the road; with more cars, the chances of accidents are higher as well. Also, more cars are stolen in such areas.

A fancy car requires more protection than the cheaper one. The insurance company will calculate the maximum cost of repair in case your car is involved in an accident. A luxurious car will certainly cost more money when it comes to repair. Car mileage is determined by how often you spend time on the road; the premium will be more expensive if you drive often. In terms of driving record, the company examines any previous accident in which you were involved, convictions record, and your driving license.

  1. Financial condition

Some car insurance companies in some states use credit information to determine the premium and other things concerning insurance policies. If you have a bad credit score, certain companies may refuse to provide coverage or cancel your renewal as well. It is best to review your credit score and improve it to avoid expensive premiums.

  1. Types of Coverage

Certain types of coverage are totally optional, while others are required by every state in the country. The optional ones generally include Collision, Comprehensive, Uninsured Motorists, and other add-on coverage. Collision coverage protects the damages to your vehicles after an accident regardless of who actually caused the accident. Comprehensive coverage protects against vandalism, theft, and disasters. Uninsured Motorist pays the cost of repairs when you are a victim of a hit-and-run by a driver who is not insured. If you purchase optional coverage, the total car insurance rates will increase.

  1. Deductible

It is the portion of any loss that you have to pay in the event of accident or damage. A deductible may vary depending on the types of coverage you purchase. A higher deductible brings cheaper premium, for example, a person who has a deductible of $300 pays less premium compared to another person who only has a deductible of $100.

  1. The company

Of course, different companies can charge different car insurance rates as well. You can actually get the information about this specific issue by researching car insurance comparisons online. However, it is possibly unwise to simply choose a company based on their cheap auto insurance quotes only. It is best to take a glance at car insurance ratings online to see each company’s financial condition, overall performance in handling the claim, and customer support.