What will Affect Your Auto Insurance Premiums

January 27, 2012

What you will pay in auto insurance premiums will be affected by a number of factors. The following paragraphs contain information regarding what auto insurance premium factors will affect your premium and what will have the largest impact.

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Base Coverage Levels

The higher the dollar amount of maximum payouts for the various forms of coverage will be the single largest factor affecting your auto insurance premiums. Coverage options are PD/PL, or personal damage/personal liability, medical coverage, underinsured and uninsured motorist coverage. The latter covers when you’re involved in an accident with a motorist who either doesn’t have auto insurance or doesn’t have enough coverage to pay for all of the damages or medical expenses incurred in an accident. The higher the maximum payout for any of these coverages, the more you will pay in auto insurance premiums.

Your Credit Rating

Your credit rating won’t have as much affect on the cost of your auto insurance premiums, but it will definitely have an affect. If you plan on acquiring a new insurance policy, or changing carriers in the future, in order to lower your auto insurance premiums, check your credit report, and make sure that everything is correct. Anything you don’t agree with is challenged before going out and obtaining quotes for the new policy.

Comprehensive and Collision Coverage

This coverage option will be required if you’re going to be financing a car purchase. The affect this coverage option will have on your auto insurance premiums will depend on the overall replacement value of the car that the policy covers. The more your car will cost to replace, the higher your premium will be.

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Many insurers offer a number of extras with their insurance policies. Some of these optional extras, with what they provide for, are listed below.

  • Roadside assistance-If you experience a flat tire or run out of gas, or you need any other sort of assistance such as towing or door unlocking, this coverage will pay for it. It’s similar to what AAA membership provides for.
  • Towing-This coverage provides for assistance changing flat tires and usually up to six miles of towing.
  • Rental Car-Comprehensive and collision coverage provides for limited payments for rental cars in case your vehicle is not drivable after an accident in which you’re at fault.

Your basic coverage levels of PD/PL, underinsured or uninsured motorist, will have the most impact on how much you end up paying for your new car insurance policy. If you’re required to select comprehensive coverage, the replacement value of your car will also have a very large impact of what you will pay as a premium. When shopping around for a new insurance policy, make sure you obtain as many quotes as possible before you choose one. There are a number of websites that will provide you with competitive quotes from a number of carriers.

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