Many people are puzzled about how car insurance premiums are determined. No doubt, you’ve wondered yourself, “why do I pay more than my friend when we both have a clean driving record?” or “why does my sister pay less when she has a ticket and I don’t?” These are great questions that all have the same answer: insurance rates are not determined by driving record alone. There are many components that make up a driver’s premium.
Although other elements influence your premium, without a doubt your driving record plays a huge role in determining your rate. If your record has tickets and at-fault accidents on it, you are going to pay a higher rate than if you didn’t have those on there. If you keep your driving record clean over a long period of time, your rates will be lower. Insurance companies reward good drivers so do your best to keep your record that way! Many insurance companies offer helpful benefits such as accident waiver protection to help keep your driving record clean so be sure to ask us about the details of this coverage.
The car you drive certainly plays a role in your insurance rates. Insurance companies rate cars by a number of factors. If you drive a high value car, then it is a given that it will cost more to repair or replace. A sports car is statistically more likely to be involved in a major accident, which means higher rates.
When shopping for a car, keep in mind the following questions:
When in doubt, call an insurance broker to ask how a particular car is being rated so you’ll be aware of the approximate premiums that your choice of new or used car will need.
Another driving force behind your premium is your postal code. Where you live determines where your car will spend most of its time. If your area has a higher frequency of accidents or thefts, you will see a higher premium. Two drivers with the same driving record and vehicle, but who live in different postal codes will have different premiums. Whether you are looking for car insurance in Whitby, Waterloo or Wasaga Beach, the insurance brokers at Mitchell and Whale work with a number of insurance companies ensuring you will get a competitive rate for your location.
Even with all the above factors combined, the bottom line is that insurance companies determine what your rate will be based on how much of a risk you pose to the company. If you are likely to have a claim and cost the insurance company a lot of money, you are going to be charged more. Keep in mind that other considerations such as age, level of license, payment history and number of years insured also factor in, so it is easy to see why no two car insurance policies are the same.
The great benefit of working with Mitchell and Whale is that we can shop around for you with different companies to find the best fit for your unique factors. You aren’t going to have the same rate as your mother, neighbour or co-worker, so let us do the legwork and find the right match for you. Please call us at 1-800-731-2228 for a no-obligation quote today!
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