The color of your car, for example, does not increase the risk of an accident and therefore, contrary to widely held beliefs, rarely affects your insurance premium. If you are 23 years old and driving a Ferrari, however, you pose a greater risk to an insurer than a 42 year-old man driving a Kia Rondo. Well, statistically at least.
If the previous example is extreme, it still implies two important variables in determining the insurance premium: the vehicle you are driving and your age. In the following list, we explore these two factors as well as others that affect the cost of your insurance premium.
While some may feel this is discriminatory, the reality is that drivers aged 16 to 25 are more often involved in road accidents than other age groups. It is therefore not surprising that the younger you are, the higher your insurance premium will be.
The vehicle you drive and the number of kilometers traveled
The make and model of your car has less impact on your insurance premium than the price at the bottom of your sales contract. Generally, if a vehicle is expensive, so will the cost of parts and repairs. So it will cost your insurer more to repair or replace your damaged vehicle in the event of an accident, which has the effect of increasing risk and thus your insurance premium.
Your insurance company also considers the number of times your particular model and make of vehicle is stolen. The number of miles driven annually is also a factor; the more you intend to use your vehicle, the higher your premium will be.
Your place of residence
Montreal drivers are well aware of this reality; the cost of insurance is higher in urban areas. Several factors play a role in this fact. There are more cars in a city and collisions are more frequent. In addition, the risk of theft is higher. All of these variables combine to increase the cost of your insurance premium if you live in a city.
Your driving record
It goes without saying that drivers more often involved in road accidents will pay more for their car insurance than those who have never made a claim. The same conclusion can be reached in regards to traffic violations which also tend to increase your insurance premium.
Note that more and more private insurers now offer packages that forgive your first accident. So if you are involved in an accident and you are not responsible, your premium will not increase.
The extent of your coverage and your deductible
The scope of your car insurance is probably the most important factor in determining your insurance premium. The amount of your liability insurance - $ 1 million or $ 2 million – as well as additional coverage against theft, the whims of Mother Nature, travelling outside North America, fire, and vandalism are just a few examples of optional protection that can be added to your coverage which will increase its cost.
The deductible also plays an important role. The deductible is the portion of the cost of the repair or replacement that must be borne by the vehicle owner. For example, if your deductible is $ 500, you will have to pay this amount out of your pocket for repairs and your insurance will take care of the rest. So, the higher your deductible, the lower your insurance premium will be given that your insurance company will always have a lower amount to cover.
The variables listed above are the most important in determining the cost of your insurance. That being said, there are other factors that may also play a role. Moreover, be aware that some factors are more important for some insurers than others, which means that you should always take the time to compare the costs of insurance premiums from one company to another.
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