How does the insurance company determine how much premium to charge you for your auto insurance? Every jurisdiction has different factors contributing to this but there are definitely common factors taken into consideration. Lets take a look:
1. Probability of a loss - Believe it or not they have accumulated tons of data over the decades and are able to determine pretty accurately what the chances are you will be in an accident. Here are some common indicators
Number of years licensed
Number of claims
Make and model of car
Age and gender
Location of primary residence
How much you drive
2. Particulars of risk - Two similar cities may not have the same insurance rating for their drivers. Certain factors including local authority and road conditions can have an effect on insurance ratings.
3. Size of deductible- As you increase your deductible the chances you make a claim will decrease. The deductible should have a direct impact on the amount of premium you pay.
4. Coverage purchased- The more coverage you want to have, the more money you will most likely have to pay. You can add coverage or have exclusions removed from your policy for an additional premium.
What do you think?
The Base Team
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