When you purchase a vehicle, you don’t just have to figure out a financing plan. You must get proper insurance coverage and bring it in for regular maintenance.
You might think your insurance rate will be high if you are young, have an incident on your driving record or are single. In many cases, that may be the case. However, there are other things your insurance company will consider when determining how much they charge you for coverage.
What do auto insurance companies consider in determining your rate?
There are many factors your insurance company considers when developing the price point for your coverage. These may include:
- How much you drive – The more often you drive, the higher your risk is of getting in an accident.
- Where you live – Certain zip codes have higher rates for filed claims.
- The type of vehicle – Some makes and models protect your body from injury better than others. Meanwhile, depending on the type of car you drive, it may be costlier to repair.
- How good your credit is – Many insurance companies check your credit history to determine how much of a financial risk you are, based on whether you’ve filed bankruptcy, your number of late payments and how many credit cards you have.
- Insurance history – If you have a lapse in coverage, some insurance companies may require you to pay a higher premium. However, remember that they may not deny you coverage due to previous insurance from the Maryland Automobile Insurance Fund.
Driving is a privilege and one that comes with considerable risk. Before getting in the driver’s seat, be sure you have insurance coverage to help cover any potential injuries you may cause yourself or others, as well as to the vehicles involved.