Automobile Insurance Premium Factors
I’m Ed Smith, a Modesto car accident lawyer. Automobile insurance companies have recently experienced a significant decrease in profit margins due to the increase of costly vehicular accidents and catastrophic storms. In order to surpass negative earnings, insurance companies may markup the premium rates of policyholders even if they are considered low-risk. It is important to review your insurance policy coverage and limits to ensure your safety in the event of an automobile accident.
Automobile insurance premiums are generally higher in value for inexperienced drivers because they tend to file more claims than experienced motorists do. As a new driver gains experience through the years, they may experience a decrease in their premium rates.
Automobile insurance companies always look at the driving record of a motorist. Traffic violations with points and at-fault accidents can affect a policyholder’s premium.
Purchasing a New Vehicle
Newer model vehicles are typically more expensive to insure due to their higher market value and repair costs. Repair costs for newer vehicles are higher than older vehicles for a variety of reasons. Newer vehicles are manufactured from aluminum instead of steel due to its lower density and improved fuel economy. The advanced technology and safety equipment of newer vehicles also come with a higher price tag for repairs. Additionally, financing a new vehicle can also increase the premiums of an automobile policy. Insurance companies will most likely require policyholders to carry comprehensive and collision coverage for a financed vehicle.
Drivers who use their vehicle for long-distance commuting and business usually pay more in automobile insurance premiums than those who travel less. The more miles a motorist drives increases their likelihood of an automobile accident, regardless of their good driving record.
Where You Live
If a policyholder moves to a home in another city or zip code, they may experience changes in their premium costs. The area’s claim history may have an impact on the rates of a policyholder. Policyholders that reside in rural areas usually have lower insurance premiums than those of urban areas.
Good Student Discount
Some automobile insurance companies may offer a policyholder a good student discount in high school up to age 25 in college. Grade transcripts may be required for submission prior to discount application.
Importance of Uninsured/Under-insured Motorist Protection (UM)
If a policyholder experiences an increase in their automobile insurance rate for any reason, they may decrease their policy limit premiums or cancel their car insurance altogether. In the State of California, a minimum policy limit of $15,000.00 is required for bodily injury liability coverage. A majority of insured motorists in California do not typically carry high bodily injury policy limits. A 2017 report by the Insurance Information Institute (III) ranked California as #13 of 51 for having the highest percentage of uninsured drivers. If a party suffers losses caused by someone else with minimal or no insurance policy coverage, they may still be able to obtain compensation through their own insurance if they carry Uninsured/Under-insured Motorist Protection (UM). Contact an experienced Modesto car accident lawyer for more details.
Read Related Content by Modesto Personal Injury Lawyer, Edward A Smith:
Modesto Car Accident Lawyer
I’m Ed Smith, a Modesto car accident lawyer. Being involved in a car accident can be very stressful, especially if injuries are involved. If you or a loved one has suffered injuries caused by a car accident with a careless driver, please call me at (209) 227-1931 for free, friendly advice. You may also connect with me toll-free at (800) 404-5400.
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