| By :
Wendy Moyer
Auto insurance companies determine the rates they offer based on a number of different factors. Let's say two different people buy the identical car with the same options and they both go to the same auto insurance company and request identical coverage. It might surprise you to know that their auto insurance rates could be entirely different. That's because automobile insurance companies offer lower rates to customers who are less risky to insure. In a nutshell, risk is the likelihood that you will be involved in an auto accident or some other incident for which an insurance company will have to pay a claim. A person's risk is determined by a number of different things. Here are the major factors that most auto insurance companies consider when determining how risky it will be to insure you and your automobile: • How old are you? • How clean is your driving record? • Where do you live? • What is the population in the area in which you live? • How many miles per year do you drive? • Are you male or female? • What type of vehicle do you drive? • What is your credit rating? Once your risk is determined the car insurance company will put you in a specific bracket. People who have the lowest calculated risk will be in the lowest bracket and will be offered the lowest auto insurance rates. Customers who have the highest calculated risk will be put into the highest risk bracket and will be offered considerably higher monthly insurance rates. One of the most important factors used to determine your monthly rates is your driving record. Therefore, it would be in your best interest if you could keep your driving record as clean as you can. For example, if for some reason you have gotten a traffic violation you should attend Traffic School as soon as possible. Also, because accidents appear on your driving record as well, it is very important to keep your car as safe as possible and to adhere to safe driving techniques. Another way to keep your auto insurance rates low is to shop around at a number of different auto insurance providers before deciding which one you want to purchase your insurance from. That's because even if each company determines your risk exactly the same way and puts you in the same bracket your premium could be a lot more at one company than another. In this case it would have nothing at all to do with you. The rates each company charges is also determined by the company's business model.
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