How the price of insurance is determined
Having an Insurance Policy is very important. In many states, it’s legally required to at least have basic insurance. Do you know how the price of insurance is determined? Insurance prices are different for everybody.
How the price of insurance is determined is influenced by factors like:
- Your Driving Record
If you are someone who has a bad driving record, it’s likely you’ll have to pay more than someone with a clean record. You also pay more if you have no track record.
This depends on the rates of accidents, theft, and vandalism in the place you live in. Or where you are usually driving.
- Type of Car
If you have a newer car, you’ll have to pay more for insurance. Older cars usually need less coverage.
- Car Value
If your car is an expensive car, you’ll need more coverage to be able to pay any damages in case of an accident.
This is an important factor. Most of the time, mature or older drivers have fewer accidents than new drivers. Insurance for teenagers and people below the age of 25 is higher.