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What factors affect my auto insurance premium

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What Factors Affect my Auto Insurance Premium?

You probably depend on your car to get you to and from work, school, and even to run errands around town. In order for you to legally be allowed to operate a motor vehicle, you need to have car insurance. If you have moved from state to state, you might have noticed that your auto insurance premium could vary wildly from location to location. What are some of the reasons why?

The Location of the Insurance Policy

One of the most often overlooked factors that could influence your insurance policy is the location. Property taxes, real estate taxes, and other fees can impact the average cost of car insurance in a given state. In addition, if a state is crowded, there is a higher chance of someone suffering a car accident. If you live in an area with a high rate of car accidents, your insurance premium will be higher. In addition, if you live in an area with a lot of crime, your insurance premium will be higher, particularly if your policy covers theft.

The Type of Car You Drive

Your car insurance is designed to cover the cost to repair or replace your car in the event of an accident. If your car is more expensive, it will cost more to repair or replace your car. As a result, your insurance premium will be higher. Furthermore, if you drive a car that is commonly targeted by car thieves, your insurance premium will be higher as well.

Your Level of Coverage

The type of car insurance you purchase will also impact your insurance premiums. The lowest level of coverage is called liability only. This is the cheapest type of car insurance; however, if you get into a car accident that is your fault, this policy will pay to fix the other person's car but not yours. For this reason, this is a risky insurance policy. One of the most common types of insurance is called collision coverage. This is more expensive than liability-only; however, it will pay to fix both cars if you are blamed for an accident. Finally, if you want an insurance policy that will cover natural disasters, this is called comprehensive coverage. This is the most expensive policy; however, it provides complete protection for cars.

Your Driving Record

Finally, your driving record will also play a role in your insurance premium. If you have a poor driving record, your insurance company believes you are at a higher risk of being involved in an accident. As a result, you will have a higher insurance premium. If your record is clean, you might be rewarded with a lower rate.

These are a few of the most important factors that play a role in your insurance premium. Be sure to shop around and see what types of rates are available.