Whether are you are buying a car first time, a parent of a
teen driver, or just want to compare insurance rates, your insurance needs may
slightly vary depending on your situation. San Diego auto insurance experts
discuss some things you should consider when you buy car insurance.
Factors that Determine Insurance Rate
There are two factors that determine your auto insurance
rate, underwriting, and rating. Insurance agencies underwrite the review the
risk related to an applicant, characterize with other similar risks, and decide
if it wants to select the applicant. The rating is based on the result of the
underwriting process which determines a price based on the insurer’s
calculations that it will cost the financial responsibility for your potential
claim.
Factors that Affect Insurance Rate
Seven factors can affect your insurance rate:
Driving record – Previous driving violations and
accidents are considered at high risk.
Geographic Territory – Urban areas have more accidents
then rural areas, thus urban areas have more claims.
Gender and Age – Men have more accidents than women,
and people in certain age groups have more claims.
Marital Status – Married people have lower claim rates.
Prior Insurance Coverage – Being canceled for
non-payment of premiums.
Mileage – higher annual mileage means higher exposure
to risk.
Make and Model of the Vehicle – Sports, exotic, and
luxury cars have higher claims.
However, a few factors can be altered based on driving
history and policies of the insurance company.
Ask Your Agent for Discounts
Discounts are awarded to better risk or safe drivers with
good driving history. Some auto insurance discounts include driver education
courses, multiple vehicles, safety devices, good student, low mileage,
anti-theft devices, auto/home package, and dividends. Every state offers
specific discounts, so it is important to check with your agent if you qualify.
Tort System vs. No-Fault System
Each state implements either a tort system or a no-fault
system. The system in your state will determine the type of insurance is
available for you. There are three basic coverages under the tort system
including bodily injury liability insurance, uninsured motorists’ coverage, and
property damage. If your state has a no-fault system, coverage may vary, but
under this system, your insurance agency will pay you directly for the losses
or injuries sustained in an accident, regardless of whose fault it is. Ask
about the laws in your state from the agent or the state insurance department.
Check for Optional Coverage
In addition to the basic liability package, the most
commonly-known coverages are comprehensive and collision coverages.
Comprehensive coverage pays for the damage to the vehicle caused by fire, bad
weather, floods, vandalism, and theft. This coverage also covers windshield
damage and broken glass. Collision coverage pays for physical damages to the
vehicle caused by a car colliding with an object like a tree or another
vehicle. This is relatively expensive coverage and is not required by the law,
but comprehensive coverage is less expensive than collision coverage but is
also optional. Other optional coverages involve rental reimbursement coverage,
medical payment coverage, and labor and towing coverage.
If you are looking for cheap online auto insurance quotes, San Diego car insurance agents can help you find the best suitable
coverage for your needs and situation.
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