by Manshu
For some, car insurance can be the most unnecessary bill in your monthly budget. Every month you send a payment in just to make sure that you’re covered in case of an automobile accident. Should the day never come in which you need to use your insurance, first consider yourself lucky, then get angry that you spent tens of thousands of dollars on something you never used.
Like a FICO score, there’s a certain formula in calculating how much you need to pay in order to be covered. With an estimated 5.5 million reported crashes and another 11 million unreported crashes every year, insurance companies need something in place to make sure they aren’t going belly-up. Let’s take a look at the four major factors in determining how policies can vary from person to person. While each provider uses different percentages in their equation, all four questions still make up your policy.
What Do You Drive? – Of all the factors that play into Insurance premiums, this one seems to be the least important. Different automakers and models have different safety features that insurance providers like and dislike. Generally, the faster and bigger the car is, the bigger the premium. While I would argue that the driver makes up for 99.9% of all automobile accidents, insurance companies would argue that certain vehicles could cause more property and personal injury damage than others. Touché!
Who Are You? – The very first information you will fill out when looking for a quote is your personal information. Usually when you sign up for something, your personal information is only used for registration purposes. With auto insurance, however, who you are plays a very big role in how much you pay. Your gender, age, marital status, geographic location and health condition are all picked apart to see how responsible of a driver you are and how likely you might be to plow into another vehicle. If you are a 17-year-old kid from New Jersey who isn’t married, you can expect to pay more than the 49-year-old married man of two from North Dakota. Even the job you have plays a roll. Professors and Engineers pay substantially less than others because historically, their sub-culture has fewer accidents than others.
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