Congratulations you bought a car! Or you’re just researching everything you need to know before buying a car. Either way: once you bought a car, you’re required to get a car insurance. If you don’t, you risk a fine, have your license revoked, end up in jail or risk very high costs once you damage your or another vehicle.
Although the internet makes it simple to compare insurance policies, rated and quotes, getting an auto insurance is complicated. Most people get confused by the unfamiliar terms insurance companies use in their policies and/or believe in misconceptions like, ‘red cars are more expensive to insure’. Let’s be clear: insurers check a lot of things before they insure a car, but the color of the car isn’t one of them!
1. How do they determine their prices?
Insurance companies have their own calculation formula to determine their rates, but every company uses the same basic factors to decide if they want to insure your car. Obvious ones are, the make & model of the vehicle and your driving history, but they use also less obvious ones:
Your Age, Gender & Civil Status
Data shows that (young) drivers with less experience behind the wheel and male drivers are more likely to cause or get an accident. Chances are that once you’re a male of 18 years old you pay more insurance than a female of 21 years old.
Place of Residence
If you live in an urban area with a lot of crime, insurance companies see you as a bigger risk than someone who lives in the countryside or a less traffic and crime rates.
2. Who can drive in the insured car?
Once you’ve got auto insurance, it’s in your name. This doesn’t mean you’re the only one who can drive the vehicle. An auto insurance follows the car, not the driver. So, if you let someone else drive your car, you also lend your insurance. This is in most cases, but it’s always a good thing to check this with an insurance agent or policy.
3. How to get the best auto insurance rates?
It’s actually the same as every other (big) purchase: you have to compare, before you buy. If you buy a new couch you don’t buy the first one you see. No, first you compare which one is the most comfortable, looks the best and has the best price. Then you buy your new couch and enjoy it for (hopefully) a long time.
Search, compare & shop is also the best strategy for purchasing an auto insurance. Every company has a different policy, therefore different rates. Compare your options by requesting quotes from different companies and find the best car insurance rate for you! To help you get started, explore our related searches below.