How to Calculate Car Insurance Rates

How to Calculate Car Insurance Rates

Cost of car insurance varies based on various factors, such as coverage type and amount required and add-ons; age, gender and driving history of its driver; make and model of vehicle valued and its safety features; location state and insurance company all play an integral role. Some of these elements may be outside a driver’s control but there are ways they can be reduced. When calculating how much a new vehicle will cost to insure, consider all expenses such as gas, regular maintenance repairs and of course insurance as factors in cost calculation;

Most states mandate minimum insurance requirements that drivers must meet in order to legally operate on the road. Although requirements differ by state, liability coverage levels will have an impactful impact on premium costs; for instance if your state mandates high bodily injury liability limits the minimum car insurance will likely cost more.

Other factors that can have an effect on auto insurance costs include driving records, credit scores and personal data. Where it’s legal, insurers will review an applicant’s credit history to assess risk – with those with higher scores typically offered reduced rates as they tend to file fewer claims than those with poorer records.

Your vehicle type can have a direct effect on the cost of car insurance. Generally speaking, safer and more secure cars tend to attract lower insurance premiums while sportier or more costly models will likely result in higher premiums. Furthermore, factors like color choice and anti-theft features may have an effect on insurance costs as well.

Drivers also have control of another factor that could lower insurance rates: their deductible. While higher deductibles typically lead to lower insurance premiums, it’s wise to factor in repair costs before making this decision.

MoneyGeek’s online calculator can help you estimate the cost of car insurance without providing confidential personal data. Simply answer questions regarding your age, city and state as well as vehicle details (year, make and model). For an accurate rate comparison between companies it is wise to obtain quotes from multiple insurers using apples-to-apples comparison of coverage types and limits – see example quotes at MoneyGeek if possible!

Review your coverage needs annually to make sure you’re only paying for what is necessary, for instance if your loan has been paid off, eliminating unnecessary comprehensive and collision coverage may help lower insurance rates significantly. It may also make sense to switch from liability coverage to pay-per-mile options or increase liability limits where appropriate.