As a car-owner, there are a lot of factors that determine your insurance premium for your vehicle. Let’s have a look at some of the most important parameters that go into deciding the premium for your insurance policy.

1. Driving Record:

If you are someone who has had a relatively clean driving record with no accidents or instances of rash driving, your insurance company will charge a lower premium for your auto insurance. In most cases, it is the policyholder’s driving record that affects the premium and generally leads to them paying a much larger amount than they had hoped for.

2. Driving Pattern and Vehicle’s Condition:

The number of hours you’ve put into driving your vehicle as well as its condition is also a major determinant in deciding the cost of your insurance premium. If you are someone who commutes to work every day and generally use your vehicle a lot, you are bound to pay more as premium to your insurance company. Your vehicle’s mileage, external, as well as interior condition also decides the premium that you must pay. If your car is in relatively good condition, premium costs will go down.

3. Your Age and Driving Experience:

Insurance companies are wary of young and inexperienced drivers due to the potentially high risk that these drivers carry with them. As an older, much more experienced driver, should you go for auto insurance, you will find yourself paying a lower premium as opposed to someone who has recently started driving.

4. The Location of Your Residence:

This particular factor may not be obvious at first but where you live and park your car is another important parameter when it comes to deciding the amount you will pay as premium. If your vehicle is in a safe and secure environment with no apparent threats such as theft or vandalism, your auto insurance premium will go down. However, if the neighborhood you reside in is prone to criminal activities and car thefts, it will lead to you paying a higher premium.

5. Type of Coverage:

The coverages you select may very well serve as major factors in determining your premium. There are several types of coverages when it comes to auto insurance. From liability coverage to personal injury coverage. as well as comprehensive coverage, all cover certain types of damages. If you select multiple coverages, your premium is bound to increase. Therefore, you need to decide which coverages are important for you and only go for those when it comes to buying auto insurance.

Speaking to a local agent or consulting multiple insurance companies and going through their auto insurance policies will help you determine what suits you best as an insurance buyer. Keeping these factors in mind will help you determine your insurance premium.