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Risk determination plays an essential role in how much you’ll pay for auto insurance. Insurers look at a variety of factors when reviewing a potential policy to assess their overall risk. You’ll find the most common things auto insurance companies look at listed below.

Car History

The history of the vehicle plays a major part in determining your premiums. This can include more than just your accident record, though. For instance, if your vehicle is considered a salvage vehicle, it may be too risky for insurance companies to take on. A salvage vehicle is a vehicle that was repaired or restored after being totaled. Most insurance companies refuse to insure salvage cars, or if they do insure them, it is at a high premium. Whether or not you own your vehicle can also play a role in your rates. Insuring a leased vehicle or one that is still being paid off can be more expensive than insuring one you own free and clear. Once you own your vehicle, be sure to remove the lienholder information from your policy, and call the insurer to discuss how changing your deductible might save you some money on your premiums.

Payments on Time

You should check your policy every year because insurance rates are steadily increasing for a number of reasons. Making timely payments is one thing that can help keep your insurance rates low. Try to avoid making even one late payment. If you are regularly late on your payments or simply don’t pay at all, your insurance company can raise your rates or, in more severe cases, completely drop your policy and leave you uninsured. Many insurance companies have an autopay feature, so if you have trouble remembering to make your payments on time, it is a service you should look into.

Other Factors

There are a variety of other factors that can go into determining the rate of a certain policy. The age of the driver can play a big role, with younger drivers being charged higher premiums due to statistically being higher-risk drivers. Your location can also factor into your premiums; insurance companies use this information to determine how risky of an area you live in. They factor in vandalism and stolen car rates, among other things. They also look at your insurance history for any gaps in insurance coverage. Having consistent insurance history usually means you’re less likely to get into accidents, leading to lower rates.

If you are looking to purchase insurance, it is important to control the risk factors that you can. Practice safe driving habits and ensure timely payments to keep your rates as low as possible. Also, contact your insurance company every few years to have your rates reviewed. There can sometimes be promotional discounts or other factors that can help lower your rates.

Here is another article you might like: https://finestautoleasing.com/2019/10/29/3-tips-for-preparing-your-car-for-winter/