Things that influence your auto insurance rates

You may think that your auto insurance comes with a fixed price from the insurance company but luckily for us (or unfortunately for some) this assumption is erroneous. The average price an American driver will pay for his or her auto insurance is about $850 per year. But it doesn't mean you have to pay that amount and can't get cheap car insurance. Nor it implies that you can't have a more expensive insurance coverage. So, when speaking about auto insurance, what are the factors influencing the final price you have to pay for your policy? Here they are:

1. Driving record.

Auto insurance companies consider your driving record as the essential factor influencing your insurance rates. Having any entries regarding accidents or traffic violations on your record will strongly affect your premiums, pushing them higher. And respectively, the cleaner your driving record is the lower will be your final rates. This factor directly shows how much of a risky driver you are, and if you are considered to be risky then your rates will surely go up. So make sure to keep your driving record as clean as possible.

2. Annual mileage.

This is another factor strongly influencing your auto insurance rates. The more you drive the more likely you are to get involved in an accident or traffic violation, from purely statistical point of view. And the less you drive the less risky you are considered to be. In case you annual mileage is below a certain number (10,000 miles with most auto insurance companies) then you can even opt for special low-mileage discounts.

3. Current residence.

Not only does every state in the US have its own special regulations concerning auto insurance, but the particular area you reside in also affects your auto insurance rates. Highly populated areas such as big cities have heavier traffic and more risks so the insurance rates are higher in metropolitan areas. In less populated rural areas even within the same state you are likely to see much lower rates. So if you are looking for cheap car insurance, maybe it's time to move somewhere else.

4. Age.

Age is one of the crucial factors determining how much of a risky driver you are. Auto insurance companies tend to regard younger drivers as being more risky and charge higher premiums respectively, while more mature drivers are likely to get cheaper car insurance if having all other factors in a good condition. So if you are a young driver, make sure to keep your other factors OK, since you'll be paying more on auto insurance.

5. Car.

The vehicle to be insured also contributes significantly to the final premium you'll have to pay each year. Car makes and models differ significantly in terms of insurance costs (repair, maintenance, safety, etc.) and every auto insurance company has charts including all possible car makes, models, options and so on. So even before buying a car, learn which autos are considered to be safer and less costly to insure. You may do so by contacting your state insurance department or asking an auto insurance broker or agent.

6. Coverage amount.

Having more coverage with your policy means that the policy will be more costly. Some types of coverage also have different prices, so you should first learn what coverage you need and what amount, and then getting it. However, some auto insurance companies offer discounts for larger amounts of coverage so make sure to ask your broker or agent about that.