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Auto insurance: Breaking down your premium

Courtesy: Sxc.hu

Courtesy: Sxc.hu


By Alyssa Ouellette
Presenter, Beat the Traffic
@Alyssa_BTT
Friday, February 28, 2014, 2:03 PM

Automobile insurance is an ongoing concern for drivers.

There are so many different insurance companies to choose from, with so many factors that can affect the rate you end up paying. Let’s break it down and find out why you’re paying what you are for your automobile insurance. If you go online or call an insurance company to get a quote, you will be asked a series of questions.

All of your answers will affect the quote that you are given. Your age, gender and even marital status can affect your annual rate. Insurance company State Farm explains that accident rates are higher for all drivers who are under age of 25 and even more so for young males and single males. The city you live in will affect how much you pay for insurance annually.


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For example, if you live in a big city with a high population and lots of vehicles, there is a higher risk of getting into a collision than if you live in a small town. If you live in a city with a high crime or theft rate, your insurance rate will be higher; some cities have higher occurrences of collisions than other cities.

All of this is taken into account. Your commute time is also taken into consideration -- do you work just around the corner from your home or does it take you an hour or two to get to work? Statistically speaking, the more time you spend in your vehicle, the higher the chance of being involved in accident or fender bender.

Your driving record is a huge factor when calculating your premium. Some companies may ask you if you’ve committed any driving infractions within the last three to five years.

The better your driving record, the better your premium. According to TD Insurance your driving record is based on the number of years you’ve been driving, number of accidents you’ve been involved in, speeding tickets received and convictions you’ve had due to driving infractions. If you’ve been in a number of collisions or have several speeding tickets, some insurance companies may not want to insure you at all.

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