Most motorists believe that good driving and claim history is enough to get decent quotations. No question, these are some of the key factors that determine your rates. However, companies are using many other details to fine tune a premium on offer. There is a possibility that a driver with great driving related records will not be able to get as good a rate as another one who is well educated, home owner and have a great credit score.
You may not even know some of these details are used for premium calculations. But you would need to score well on them if you want cheaper auto insurance quotes. A recent study carried out by getting quotes for various types of drivers revealed that education, occupation and home ownership played an important role in determining price. And companies responded to the data offered to them with varying degrees of intensity.
Two online auto insurance quotes were obtained for exactly the same details but changing the education, occupation and homeownership. The results showed that motorists with better education, job and home ownership received as much as twenty percent better rates in general and with exceptions of as much as half the premiums.
Overall, better educated people with good jobs and home are seen to be lower risk by insurers. This suggests that companies receive fewer claims from such people. A university graduate with a white collar job was preferred to high school graduate with a blue collar job by most companies. Owning your home appeared to be significant in premium calculations as well.
Another study shows the state you live in plays a key role when it comes to vehicle insurance. Cost of insuring a vehicle was as much as eight percent of salary in some states. In cheaper states it is down to only two percent of the salary in average. So, zip code affects automobile insurance premiums.
This is down to density of population, number of accidents, auto theft as well as the stringent insurance laws and requirements in your state. Drivers in highly populated states with heavy traffic end up paying higher rates. In the same way, crime rates in the area affect how much the policyholders pay. This explains why drivers in Michigan would pay a lot more than Alaskan drivers with similar details.
Drivers should keep in mind that auto insurers have different rate schedules from each other. While one company may be placing high importance on your education and weather you own your home or not the other company may not give a toss about it. The above research shows that the premiums offered can fluctuate wildly from one company to another.
It is important to know how car insurance works and how premiums are calculated. If you are getting ridiculous quotes from some companies it does not mean that you would not be able to find an affordable automobile insurance policy. It just means that you need to work a little harder to find what you are looking for.
So, shop around until you find the ideal policy from a reputable insurer at an acceptable premium. The difference in premiums between a driver who shops around and the one who takes the first quote can be seriously high as well.