We have all heard the term “car insurance premium”, but what does it really mean to you individually and how can you get it lowered? This article will examine what a car insurance premium is and how you can get discounts to lower it.
What is a car insurance premium?
A car insurance premium is a set amount that insured drivers must pay to receive auto insurance. Insurance companies usually determine premiums after looking at your “risk” to their company. The “risk” is determined by looking at statistics based on categories that you may fall into, the base price of premiums are not individually determined, but rather determined based on categorical statistical data. Insurance companies do however offer discounts to drivers who lower their risk to the company by qualifying for predetermined discount categories. Drivers still have to pay a deductible if they get into an accident; the deductible is a separate charge from an insurance premium.
What are some common discounts that will lower my car insurance premium?
1. Good driver discount
The good driver discount is awarded to drivers typically when the driver has been accident free for at least two years and has received no moving violations. Some insurance companies will offer a percentage back on the premium for staying accident free for a given amount of time.
2. Good student discount
Insurance premiums are higher priced for younger drivers due to their inexperience and risk to the insurance company; however, students who make honor roll or dean’s list will be awarded a discount to their insurance.
Older experienced drivers will have lower premiums than younger drivers will because they are typically less risky to insure.
4. Multiple policy discount
Combining multiple insurance policies into one billable policy can save you hundreds of dollars on your insurance premium. Common discounts are combining auto insurance with homeowners insurance.
5. Vehicles safety features
Safety features such as ABS (anti lock brake system), airbags, side airbags, and more will all qualify you for additional savings on your car insurance premium. Why do safety features get you a discount? Safety features get you a discount because the risk of you getting into an accident or seriously injured is reduced.