Car Insurance Policy
Car accident insurance policy has different types of coverage; the most common are bodily injury liability for at-fault drivers who injured someone in the accident, collision coverage for car repairs, comprehensive coverage for buying a new vehicle as a replacement, and liability insurance for at-fault drivers to help them pay car repairs and medical bills of the injured party.
Meanwhile, insurance rate is determined by many factors such as:
- Age – car insurance providers require higher rates for teenage drivers since they are the most vulnerable age group to road accidents.
- Driving history – insurance firms demand higher premiums for people with bad driving record since they are considered high risk policy-holders.
- Gender – insurance companies require higher rates for male drivers ages 16 to 25 than their female counterparts. This is not gender discrimination, but a decision based on years of studies show that males are riskier drivers than females which make them more vulnerable to accidents.
- Location – the insurance rate will depend on the location since some states have higher accident rates compared to other jurisdictions.
- Credit score – if a person has a bad credit record, his car insurance rate can increase since providers will consider him a high risk policy-holder.
- Car model – luxury car owners will have higher premiums compared to policy-holders with cheaper cars.
According to the California Department of Motor Vehicles (DMV), there are several ways to lower the car insurance premiums and get a discounted rate such as:
- Maintain a good driving record – insurance providers will most likely give discounted premiums to people with good driving records.
- Ask for discounts – some insurance firms offer up to 5 percent discount to senior drivers and students with good academic grades.
- Enroll to a car safety course – some insurance companies give discounts to people who have taken road safety course.
- Get insurance package deals (also called as bundling) – a driver can ask for discounts if he gets several insurance coverage under one provider
- Reinforce the car with safety and anti-theft equipment – if a vehicle has these additional features, policy providers will lower the car insurance premiums.