Vehicle Insurance is insurance purchased for cars, trucks, and other road vehicles. Its primary use is to provide protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from and is a comprehensive cover for your vehicle that provides protection against damage or loss.
There are Factors That Insurance Companies Will Use to Determine Your Vehicle Insurance Rates
Your driving record plays a huge part in how much you will pay each month. If you get one speeding ticket, it is not going to do much to your insurance costs. However, getting multiple tickets in one year will cause your rate to rise.
Your insurer will also factor in the kind of car you are driving. Newer vehicles will cost you more to insure. Some vehicles, new or not, will always be thought of as high risk because of a high theft rate. Sports utility vehicles are going to cost more to insure than passenger cars. Sports cars such as the Corvette or Mustang are going to be expensive to insure. Insurance companies know that people who buy these cars will not go the speed limit.
Another big factor in vehicle insurance rates is age. If you are younger, you are bound to pay a lot more for your insurance than someone who is much older. Vehicle insurance rates start to drop at age 25. Insurance companies know that younger drivers tend to be more at risk behind the wheel because they are not as experienced, can make mistakes and may be reckless. Most accidents that occur have involved teenagers and young adult drivers. Most of these accidents were preventable.
Insurance companies will also factor in marriage since statistics show married people tend to drive safer on the road. The reason is that insurance companies see married people as having more to lose than single folks. After all, married people tend to have jobs, families, children, a home, etc. They often do not want to lose these things for a cheap thrill ride. However, unmarried folks are more likely to take unnecessary chances and drive recklessly.
Automobile insurance companies will also factor in where people live to come up with vehicle insurance rates. For example, people who live in a city tend to pay more than those folks who live in a smaller town or out in the country. Any place that suffers from inclement weather that causes an extraordinary amount of accidents will have higher vehicle insurance rates. A person who lives in the city is at a higher risk for accidents because they are driving in crowded areas.
The vehicle insurance industry has a significant amount of risk assessors and statistics analysis professionals to spot trends and conduct market research. The data they collect will let them know which demographic is high risk and which is not.
Vehicle insurance can cover some or all of the following items:
? The insured party (medical payments)
? The insured vehicle (physical damage)
? Third parties (car and people, property damage and bodily injury)
? Third party, fire and theft
? In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)
Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.
About the author
I am a car insurance agent for a long time. I always deal with companies that are selling cars.