There are many factors that go into determining the premium for each insurance policy. Although you may be paying $1000 for your car, and your friend pays $600, you are not necessarily being swindled out of that $400. Besides what insurance company you are with, here are some important things to think about that go into the premium.
Age– Young drivers and those under 25 typically pay more than those who are older due to driving experience. Just become you become a year wiser doesn’t necessarily mean you will be paying less. Every company has their own criteria for rating on age and a 65 year old may be paying more than a 64 year old simply due to the rating structure.
Occupation– Studies have been done showing particular occupations that have a safer driving record than others. This does not necessarily mean that every doctor or engineer has a perfect record, however on average they tend to be safer and companies like Farmers offers “Affinity” discounts for many occupations from Accountants to Scientists and many others.
Vehicle– This may seem obvious but many forget to factor in that they are driving a 2012 vehicle and their friend is driving a 1995. Also factored in is the claim rate on the vehicle. If in 2011 there was an increase in a particular car being vandalized or in accidents, the next year the comprehensive and collision rates may increase, even if your driving record did not change.
Vehicle usage– Every company estimates how much you drive your vehicle. On average people drive 12,000. Someone who works from home and does not leave the house much may not have as many miles as a Realtor who is driving quite frequently. If your usage has changed make sure to call your insurance company and update that. If you are driving less, you have less risk and your premium may be reduced.
There are many other factors and will share more information later. If you have questions on yours please feel free ask.
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