Why You Can’t find Cheap Car Insurance

American drivers are bewildered as to why affordable car insurance is so hard to find. All you want is the minimum legal coverage and you end up paying an arm and a leg! There are several reasons why you might be faced with astronomical premiums. Knowing how your rate is calculated can help you understand your situation and how to deal with it. More information is always a good thing!

Reasons for High Car Insurance Premiums

High risk drivers face the highest premiums. Insurance companies do not want to pay out. If you pose the risk they might actually have to pay a claim, you are high risk! Many factors put you in the high risk category. Age – young people haven’t established a good driving record – is near the top, but there are other factors. A history of drinking and driving is probably the number one high risk factor, especially if you have caused an accident while under the influence. If your drunk driving has caused death, many states will ban you from driving, so never mind about insurance.

It is important to know how you are categorized. You might think your driving record is spotless, even though you have had numerous fender benders and traffic violations. What is a fender bender anyway, right? Well, to an insurance company it could be several thousands of dollars! Especially if you hit a high end car. Even traffic violations such as speeding tickets can affect your insurance premiums. Speeders are considered high risk.

Other Reasons for Expensive Car Insurance Premiums

Sports cars, rare cars and classic cars are extremely desirable. If you own a car like this you are susceptible to theft. Insurance companies look at this. This does not reflect on your driving record, but it puts you in the high risk category simply because your car is highly desirable. Even several “average” cars fall into the desirability category due to their re-sell value, chopability or simply – demand.

Where you Live

Believe it or not, where you live and how many miles you drive per year is a big factor on your premium. If you live in the boondocks and only drive to town once a month, your chances of having an accident are slim. Therefore, your premiums will be low. If you live in a big city and drive to work every day, your risk of having an accident are much higher. Thus, your premiums will be higher.

Find out where you stand. Talk to your insurance agent and try to get the best insurance coverage for the lowest price. If you do have a blemished record work to improve your driving. If you are a young driver, bite the bullet, keep your record clean and you will get better rates very soon!

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