What You Need To Know About Insurer Investments

May 17, 2017 · Posted in General Articles on Car Insurance 

Before buying car insurance it?s important that you understand how the companies work. Customers are investments to insurance companies. Either a customer is a good investment or a bad investment. The reason this affects you is because it will influence your premium that the insurance company quotes you.

When an insurance company is trying to file you in the good investment category or the bad investment category they take several factors into account. One factor is your age. Older drivers have a lot lower insurance premium just because of their age. This is because studies show that younger drivers get into more accidents due to their inexperience. Young males also have higher premiums than young females because studies show that females get into fewer accidents than males. After a few years these young drivers get their premiums lowered, usually at the ages of 21 and 25.

One of the biggest factors that determine your risk to the insurance company is your driving history. Once you have an accident you can expect your insurance rates to go up for a while. If you have another accident the rates will go up further. Sometimes drivers won?t report small accidents just because they would be paying more in monthly car insurance payments compared to the accidents cost.

Every insurance agent that you talk to will ask you what type of vehicle you drive. You can expect this to have a huge influence on your insurance rates as well. Sports cars are one type of vehicle that experience higher rates due to the higher cost of repairs and the increased likelihood that they?ll be in an accident. Modifications to a vehicle are not covered by the insurance company in the event that your vehicle is totaled. The best way to get low rates is to drive a typical car.

Surprisingly, car insurance agents also calculate your rates by the area you live. Your zip code is given a certain risk assessment, and that will play a factor in how your rates change. If you live in the inner city you rates will be more expensive than if you live in the country. This is because there is more theft and vandalism. Sometimes collage students will register their car insurance with the address of their parent?s home to escape these higher rates.

Sometimes a car insurance company will lower your rates if you are a good driver or if you have been with them for several years. If they are willing to do this for you it means you are a low risk investment. The insurance company feels that they will be making more money from your monthly payments compared to what they will have to pay for your accidents. To lower these rates further you can try taking out more than one type of insurance with the same company. When you take out multiple insurances they will get more money without changing much of their risk. If you are trying to get good rates will want to make sure you are being the lowest risk possible to your insurance company.

Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading car and vechile portal, which helps people save on their car and vechile.

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