How Car Insurance Premiums are Calculated
Most people do not realize that many factors help determine the cost of your car insurance premiums. They are not set in stone and there are ways of getting deductions.
Auto insurance providers take several different factors into consideration when calculating the rates for your insurance policy. These rates may be different for different people because of these factors and each insurance policy is therefore different. This article will discuss how the following factors are used to determine how much your car insurance premiums will cost:
* Your driving record
* The vehicle you drive
* Where you live
* Safety features included in your vehicle
* How you use the vehicle
* The type of coverage you have
* Discounts that could apply to you
YOUR DRIVING RECORD
Your record of driving is one of the most important factors that insurance providers consider when calculating your insurance rates. If you have a clean record with no accidents, you will get a better rate than a person who has several accidents on his/her record. Your company may have a forgiveness policy in place for the first accident, so this will not count against you as long as you remain with this company. if you switch insurance companies, though, the accident does come into play and will result in a higher rate for car insurance.
If you have received any speeding tickets in the past year, this also affects the rate of insurance because you will be deemed as being a poor risk with the increased likelihood of causing an accident due to your poor driving habits.
Inexperienced drivers, such as those who have recently obtained a driver’s licence, pay a higher rate because of the lack of a driving record. This also applies to those obtaining auto insurance in their own name for the first time, no matter how long they have had their driver’s licence.
THE VEHICLE YOU DRIVE
The type of vehicle you drive has an effect on your cost of auto insurance. Some vehicles are more prone to theft than others. If you are curious about where your vehicle lies in such statistics, you can consult with the list of most popular autos for thieves in your state or province. Just because your car may be small and inexpensive does not mean it will not be a target for thieves. Larger vehicles and more expensive cars are not necessarily high on this list. The insurance company looks at the statistics of auto theft according to the ones that are the most popular for ease of breaking into and even the color of the vehicle can play a part in this.
The cost of repairs to the vehicle comes into play when determining this aspect of calculating your insurance rates. More expensive and foreign automobiles are more expensive to repair and replace and this will place you in a higher category when it comes to taking out insurance.
WHERE YOU LIVE
Drivers in cities are at a higher risk of being involved in an auto accident that causes extensive damage and injury to passengers. Therefore, living and driving in a city means that your insurance rates will be higher. Even if you do live in a rural area that is associated with a metropolitan area, your insurance rates may be calculated on the statistics of that city.
SAFETY FEATURES INCLUDED IN YOUR VEHICLE
Most new makes and models of vehicle do have all the modern safety features, such as seat belts, anti-theft devices and air bags. If you have an older make auto, you can save money on your car insurance by having these features installed. It is only the initial cost of the installation that can save you money year after year on your premiums.
HOW YOU USE YOUR VEHICLE
It costs more in auto insurance if you drive your vehicle to work each day. This is because you are on the highway during rush hour traffic and as such are at an increased risk of being involved in an accident. If you work in the city, then you also have to have parking during the day, which puts it at risk of vandalism or theft because it is unattended for long periods of time.
THE TYPE OF COVERAGE YOU HAVE
The amount and type of coverage you have on the vehicle will impact your cost of insurance. There is an amount for which you are responsible for paying when you make a claim called a deductible. Bu going with the standard deductible, rather than choosing a higher amount, you will pay a higher premium because the insurance company is assuming more risk.
On an older vehicle you can save money by having only public liability which covers the other vehicle and the passengers if you are at fault in an accident. This is a much cheaper policy, but it also means you will not receive any money for injuries or damage sustained to your vehicle.
Fire and theft are common types of coverage in auto insurance. You can also have insurance for glass breakage included at an extra cost if you wish.
You have two options with regards to the insurance on the value of the vehicle – actual cash value and replacement cost. Actual cash value means that if your vehicle is a total loss in an accident, the value is subject to depreciation over the length of time you have owned the vehicle. This means that you will only get the book value, which may not be enough to pay off the money that you still owe on the loan. Replacement value is a more expensive option, but it means that if the auto is a total loss you will receive the amount of money you need to purchase this type of vehicle again.
DISCOUNTS THAT COULD APPLY TO YOU
Most insurance companies have various types of discounts available in auto insurance policies. For example, there is an age discount for those aged 55 years and over. Good students who maintain an A average in school will also get a lower rate because they are seen as being more responsible. If you have your home and all your vehicles insured with the same company, this will also qualify you for a discount.
CONCLUSION
It is important that you shop around for auto insurance to get the best coverage at the most competitive price. Don’t be afraid to ask questions and always make sure you read the fine print.
Content Source: Bukisa – How Car Insurance Premiums are Calculated
Categories: Insurance Tags: car insurance, how to, insurance policy
How to Avoid High Credit Card Fees
Individuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.
There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current “bad credit” credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.
“Bad Credit” Credit Card #1: This credit card charges a very low interest rate for an unsecured credit card. However, your first fine print glimpse reveals that there is a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we’re up to $124 in expenses. That’s got to be it, right? No. Add in another $48 for the annual fee and $6 per month in account maintenance fees. That’s brings the cost of your new credit card to $244 the first year, and $120 each additional year. This is no small change, and a card such as this should be considered only if you cannot be accepted for a better unsecured credit card for bad credit.
“Bad Credit” Credit Card #2: This credit card charges a very high interest rate for an unsecured credit card. This can’t be good. But the setup fee is only $29. Maybe this card isn’t so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but you will also pay $228 a year just to maintain the credit card. There has to be a better offer.
“Bad Credit” Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer’s review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.
Clearly, there are substantial difference between “bad credit” credit cards. Of the three offers we have examined, only one doesn’t take you to the cleaners. In fact, “bad credit” credit card #3 provides great value. All positive changes to your credit history and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, but in the long term, rebuilding your credit with a “bad credit” credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit in the first place.
©2006 Credit Card Depot Inc.
Categories: Credit Tags: bad credit card, bankruptcy credit cards, credit card fees, poor credit credit cards
Ask for Pay Rise
One day an employee sends a letter to Her boss asking for an increase in her salary!!!
Dear Bo$$
In thi$ life, we all need $ome thing mo$t de$perately. I think you $hould be under$tanding of the need$ of u$ worker$ who have given $o much $upport including $weat and $ervice to your company.
I am $ure you will gue$$ what I mean and re$pond $oon.
Your$ $incerely,
Marian $hih
The next day, the employee recieved this letter of reply:
Dear Marian,
I kNOw you have been working very hard. NOwadays, NOthing much has changed. You must have NOticed that our company is NOt doing NOticeably well as yet.
NOw the newspaper are saying the world`s leading ecoNOmists are NOt sure if the United States may go into aNOther recession. After the NOvember presidential elections things may turn bad.
I have NOthing more to add NOw. You kNOw what I mean.
Yours truly,
Manager
Categories: Uncategorized Tags: humor just for thought