What You Can and Can’t Control When It Comes to Auto Insurance Premiums

How much do you pay for auto insurance each month? Do you know how insurance companies come up with that monthly or yearly premium? Before signing onto a new policy, make sure that you understand the ins and outs of how your premium is calculated, and what you can do to control that cost.

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What You Can’t Control

According to Forbes Magazine, there are several factors that predetermine how much a consumer is going to pay. No matter which company a person is considering, these things tend to be the norm.

Men are going to pay more than women for auto insurance. While some see this as a form of discrimination, auto insurance companies must weigh the risks involved with offering insurance to each driver. Statistically, men are more of a risk when it comes to letting the rubber hit the road than women. While it may be a large generalization, premiums have been calculated that way for years.

Aside from gender, a person’s age is going to affect how much he or she pays each month to keep a vehicle insured. Just like gender, there are certain age groups that tend to be considered more of a risk than others. Drivers between the ages of 16 and 25 are just starting out on the road. Inexperience combined with other risky behavior keeps these consumers paying the highest rates than anyone else.

What You Can Control

It can be tempting to get frustrated with the way the system is set up. Going into the process of insuring a vehicle, some people are going to pay more than others. However, there are ways that an individual can save money on his or her premium each month. By taking advantage of these tips courtesy of ABC News,  drivers at least have an opportunity to keep a little more money in their wallets.

Every insurance policy, whether it be homeowner’s insurance or car insurance, has a deductible. This is the amount a consumer pays before the insurance begins to start picking up the tab. Higher deductibles mean lower premiums. Consider how much of a deductible you can practically afford and make the adjustment. This should instantly provide some savings. Check out Money Tips for more information on insurance deductibles and how much you can afford should you have an accident.

Consider going into auto insurance with a group. Health insurance is often more cost effective when purchased through an employer. This is because a large group of consumers are all looking for coverage, allowing a lower price to be negotiated. The same is true for auto insurance when it comes to warehouse clubs. Because of the large number of members, it is possible for better premiums to be negotiated.

After considering the things that you can and cannot change when it comes to auto insurance premiums, there may be one more ace up your sleeve before you settle with a company. Remember that you can shop around to find the best rates. While auto insurance companies offer similar policies, not all premiums are the same, and this is allows you some added flexibility.