A New Guide Presents The Top Factors That Influence Car Insurance Rates

LOS ANGELES, Aug. 17, 2020 /PRNewswire-PRWeb/ -- Insurance companies rate clients and place them in 3 main risk categories: Preferred, Standard and High-Risk. Multiple factors are analyzed in order to assess a client's risk profile. The main factors that influence car insurance rates are the following:

    --  The area where the policyholder lives. Car insurance rates are
        calculated based on the customer's ZIP code. Each state has a certain
        car insurance legislation. This includes minimum liability coverage,
        laws regarding no-fault coverage, reimbursement limits, when a car is
        considered totaled and other relevant issues. Furthermore, the ZIP will
        tell the insurer if the client lives in a metropolitan area or a rural
        area. Car theft frequency, riots and reports of vandalism for a specific
        area taken into consideration. The geographical layout and position
        influence rates for certain coverage types. For example, people living
        in coastal areas, more exposed to hurricanes, pay more expensive
        comprehensive coverage.
    --  Driving history and recent traffic violations: As expected, people with
        clean records have better rates. Companies prefer to work with drivers
        that have not been involved in accidents in the past 3-5 years. A person
        with multiple traffic violations or accident involvements may be seen as
        high-risk.
    --  The car's make and model: When asking for coverage, the client must
        provide the following basic info about the car: fabrication year, make,
        model, sub-model (body type). Furthermore, the driver will be asked if
        the car is equipped with crash avoidance technology, anti-theft devices
        or recovery devices. The type of car and its value also influence the
        cost. Expensive, sports car that cost a lot are more expensive to
        insure.
    --  Credit score: Drivers with poor credit scores are considered a higher
        risk by many insurance companies. Persons with a poor FICO score should
        consult experts in order to develop a strategy for repairing the credit
        score.

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SOURCE Compare-Autoinsurance.org