What to know about Auto Insurance Rates

If you do not know anything about auto insurance rates it would be a good idea to learn before buying a policy. The last thing you want to do is spend too much on coverage – this is a waste of money.

Here are three things you should know about auto insurance rates:

1. How much you pay is based largely on your driving history. Have you been clean of accidents and traffic violations for the past five years or more? Or do you have a few red marks here and there? Your driving record will greatly determine how much you spend on auto insurance coverage.

2. The type of car you drive matters. Some people believe that all cars cost the same to insure – this is far from the truth. A brand new sports car will cost much more than a 10 year old station wagon. If you are trying to save money, opt for a vehicle that costs less to insure.

3. More coverage means a higher rate. While you must make sure you get enough auto insurance coverage, overdoing it will lead to a premium that you may not be able to handle from a financial standpoint. For example, a lower deductible means a higher rate. Changing this around can lead to greater savings in no time at all.

There is a lot that you need to know about auto insurance rates. The three details above are a great place to start. Now that you know more about how your rate is calculated, you can make the changes necessary to keep the cost of your policy to a minimum.