What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

Car Insurance Estimate

The car insurance estimator enables car buyers to work out the insurance costs of their new cars. While estimating the insurance rates for cars it is very important to consider the type of the car. The car insurance price varies considerably with different types of car. It is advisable to gather in advance the car insurance rates for the car models which the buyer is likely to select. Those who plan to buy a car should include the car insurance premiums also while determining the total expenses of the vehicle. Insurance companies fix different premium amounts for different car models. Higher the car price, higher will be the insurance costs. The car insurance rates for sports cars and various other high-end models will be comparatively higher. The insurance cost of the car that efficiently protects the driver is comparatively less. The safe driving vehicles are more unlikely to meet with accidents and consequently there will be fewer claims for damage as well as injuries on behalf of such vehicles. Safe drivers prefer to drive safe vehicles like minivans and the insurance premium for this type of cars will be comparatively less. Prior to purchasing the car insurance policy, the driver can get an initial estimate of the insurance rate using the Nerdwallet’s car insurance comparison tool. It is always a good idea to have a car insurance estimate in advance. Car insurance comparison is to be carried out while shopping for affordable auto insurance and hence one should gather information regarding car insurance rates of a few reputed insurance companies.

Car insurance rates and age of the driver

ExperienceBodily injury base rateInexperience surchargePremium
0-1 year $189.56 2.172 $411.72
2 years $189.56 1.945 $368.69
3 years $189.56 1.789 $339.12
4 years $189.56 1.669 $316.38
5 years $189.56 1.324 $250.98
6 years $189.56 1.299 $246.24
7 years $189.56 1.1 $208.52
8 years $189.56 1.059 $200.74
9 years $189.56 1.059 $200.74
10 years $189.56 0.946 $179.32

The average auto insurance rates will be more for the drivers who are inexperienced. Hence for the insurance agency, the experience of the driver is more important than his age. The auto insurance rates for drivers who are in their teen ages will be more than the average insurance price for elderly drivers because the teenagers are inexperienced. If a driver has a clean traffic record only his inexperience can be the reason for a higher car insurance premium. Insurance rate for the inexperienced driver is higher because he is considered as a very risky driver by the car insurance company and the risk factor gets reflected in the rates. For a driver, his initial car insurance rate will be the rate of his car insurance in the first year of his driving which will be the highest. The liability coverage for physical injuries will gradually reduce during the first decade of driving. The drivers who are above 25 years of age will find their annual car insurance rates rather stable, provided, they maintain clean driving records. For the senior drivers, the crash rates will be higher and their insurance premiums will be more.

Car insurance rate and address of the driver

The area where the driver lives have an impact on his car insurance rates. The auto insurance estimator works out the rate of insurance based on whether the driver lives in an urban area or in a rural area. Drivers who live in busy and congested metro areas will be making more claims since they meet with more number of accidents. Hence those who live and drive in metro areas have to pay more for their insurance policy whereas the insurance companies charge comparatively less for those who live and drive in rural areas. The other factors that affect the car insurance rates include a number of riots and vandalism that occur in the area in a year, number of insurance claims made from that area and also the number of fraudulent claims made from that area. The insurance companies use such data to calculate the risk involved in insuring a driver.

Why insurance prices for some cars are cheaper?

The insurance agents go through the injury records of different cars and when they find that a particular car has the record of more number of wrecks, the cost of liability insurance for that car will be more. The insurers identify the cars which are highly priced, which are expensive to repair and which are easily stolen. For such cars, they charge more for some of the coverage options such as collision coverage and comprehensive coverage. Insurance companies even refuse to provide insurance coverage to some particular types of cars or some particular brands of cars.

Advantage for married couples

While the insurance companies estimate car insurance for married couples, rebate in the range 5% - 15% is offered. This reduction of insurance rate is because of the fact that when compared to single drivers, married couples cause less number of accidents and make less number of claims. Married couples can also get insurance coverages for discounted prices when they have multicar policies, multi-line policies, etc.

Driving record and car insurance rate

All insurance companies go through the driving records of those who want to purchase car insurance policies. Those with clean driving records are eligible for discounts. For those who have a driving history of violation and accidents may have to pay a surcharge over and above the standard insurance rates. A few insurance companies refuse to provide car insurance coverage to those who have a lot of violations and accidents in their driving records.

Annual mileage of the driver

While deciding the car insurance rates for drivers, the insurance company takes into account the total distance that the driver is likely to drive in a year. Those who drive less will have less number of chances to meet with an accident and the comparatively lower rate will be fixed for their car insurance. The insurers also consider the length of the driver’s commute. From the length of the commute, they can find out whether the driver commutes to a metro area from a rural or suburban area.

Impact of credit rating

Insurance companies go through the credit history of the driver and the insurance rates will be impacted by the credit rating of the driver. However, in three states – California, Massachusetts, and Hawaii – credit score is not considered for fixing the price of the car insurance policy. Drivers who have low credit scores are riskier in the eyes of the insurers. They are likely to file a number of claims and apart from that those with poor credit scores may exaggerate their claims or even commit insurance fraud. Hence drivers with low credit score will have to pay a surcharge for their low credit score. For six-month policy, the drivers with low credit score will be asked to make an upfront payment of the entire premium amount. For policies of longer periods, they will be asked to pay upfront a considerable portion of the premium and the balance amount in monthly installments.

Cheap coverage and expensive coverage

Those who require more coverage in their car insurance policy need to pay a higher price. The car insurance cost will be the least for those who opt for the minimum liability policy in order to fulfill the legal requirements of the state.

Insurance quotes from different insurance companies

Drivers who shop for car insurance policy will come across with insurance quotes from various insurance companies. A Proper comparison of the quotes is very important for choosing the best option. While comparing, the driver should ensure to compare the same coverages of different insurers. The reputation, as well as the financial position of the insurance company, is also to be considered before buying the policy. Also, each insurance carrier has its own guidelines as well as rules for underwriting. For a driver whose driving record is not so good, one company may impose a surcharge to the extent of 10% whereas the surcharge of another company will be only 5%. One company may go through the driving record for the last three years only whereas another company may go through the record for the last five years.

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