HOW ARE QUOTES CALCULATED?
The basis of all auto insurance is an estimate of the risk you will make a claim. Put simply, the higher the risk, the higher the premium rate you will be asked to pay. So, who are you, where do you live, where will you do most of your driving, and so on? The answers to these questions will set the rate. If you are a young person, coming to driving for the first time, the statistics show a high risk you will have an accident. At the other end of the age range, people over the age of 65 begin to lose their ability to react quickly in an emergency. Their eyesight also begins to dim. Again, the statistics show a rising trend of accidents, particular as people continue driving in their 70s. If you live in an inner city area where there are high rates of vehicle theft and vandalism, the cost of comprehensive cover will also be high and so on.
The quote system sets general auto insurance rates based on groups of people who have the same basic driving profiles. But, when it comes to you as an individual, you may not fit exactly into the group. So, by allowing you discounts, the rates can be made to match your personal profile more exactly.
Low mileage — no matter where you live, you will always be rewarded if you only drive short distances at off-peak times of the day. There are new pay-as-you-drive policies that depend on fitting technology to your vehicle to show when and how far you drive.
Low traffic conditions — if you live in a rural area where there’s less traffic, the risk of an accident is lower. Even if you live in a city, only driving when the traffic is light and avoiding night driving reduces the risk of an accident.
Safe driving — many insurers reward you with a discount if you drive without making a claim.
Fitting safety equipment — the better equipped your vehicle to drive more safely, e.g. passive restraints, anti-lock brakes, etc. or prevent theft, the larger the discount.
Deductible — you pay the first element of every claim. The majority of drivers opt to pay the first $500.
Bundling — you will earn a discount if you have several vehicles or combine home with auto insurance at the same company.