Posted by: Lauren Cappelli, Group 1A
Auto insurance rates vary depending on various characteristics of the holder and their automobile. Some of these characteristics include the age of the holder, where they live, the type of vehicle they drive and how they use their vehicle.
Age has a big influence on the cost of auto insurance. Insurance companies feel that certain age brackets hold a greater risk when it comes to driving an automobile, therefore increasing the rates. “Traditionally, males under 25 years of age represent the highest risk, while married, middle-aged, non-smoking mothers represent the lowest” (MSN Autos).
The place in which the holder lives also has an influence on the premium they will pay. Generally the more urban the area the holder lives in, the higher the rates. This is due to the increased number of cars and the higher occurrence of accidents. The amount of thefts in an area affects the premium as well.
The type of vehicle that the holder drives is also a factor that affects the premium paid. The model, color, and cost of repair are three big factors that play a role in the price of the insurance (insure.com). Traditionally sporty, luxury cars will result in higher premiums.
Lastly, how the vehicle is used is another determinant in the cost of a premium. The more miles driven, the greater the chance that an accident will occur therefore increasing the risk. An increased risk results in a higher premium.
Shopping for Auto Insurance. MSN Autos
Which Cars Cost More (Less) to Insure. Insure.com