The bottom line about car insurance rates is that they are not always fair. That is the first thing that you must understand because there will be cases where people who are great drivers are given higher car insurance rates than those who are poor drivers. The reasoning behind this is that it is difficult to find out how good of a driver someone is until he or she is caught driving in an unsafe manner. Therefore, one of the most important aspects of your car insurance rate will be how long you have been driving and how many tickets or accidents you have had. The first thing that a car insurance company will look at is which group you fit into, which is based on your driving history. Once you have been grouped, you can then apply for any discounts that you qualify for; however, do note that you will be given a base rate beforehand.
The factors that will affect which group you are placed in include your age, gender, marital status, zip code, accident history, tickets, occupation, and many other variables. This might seem discriminatory and in many ways, it is, as things that are beyond your control are factored into the price that you will pay. The only things that cannot be legally discriminated against are race and religion, but there is a chance that other aspects of your personal life will be factored into your car insurance rates. Different companies offer cheap car insurance for different people, however, so it is important that you shop around and find the best possible deal to meet your needs.
Another thing that will influence your car insurance rates is the type of coverage that you want and the type of car that you drive. If you drive an expensive car with a powerful engine, you can expect to pay more than someone who is driving a family sedan. Certain safety features can make you eligible for a discount, so make sure that you factor that in when looking for cheap car insurance. Things like collision and roadside assistance will increase your car insurance rates, but will be worth it in the long run if something should go wrong.
Remember that about 70% of your car insurance rates go toward losses that the company incurs over the course of the year. These rates are carefully designed so that the company does not take massive losses because, after all, each company is a capitalist enterprise. After that, about 26% of your money goes toward commissions and administrative costs, with the rest being actual profit for the company. There is always cheap car insurance to be found, but make sure that you keep these numbers in mind and adjust your expectations accordingly.