Car Insurance Prices

Car insurance is a simple trade of money for risk. In exchange for your premium, the insurance company assumes the risk that you'll have an accident or your car will be stolen or damaged. The greater the risk, the higher the premium. So to keep car insurance prices low, you need to keep your risk level low.

The three main factors that determine car insurance prices are you, your car and where your car is driven. Anything about you as a driver that a car insurance company views as a negative, can increase your rates. But you can often reduce or cancel out a negative with a corresponding positive factor. An obvious negative would be if you had a recent accident. And to reduce its effect on your premium, you could take a safe driver course or possibly eliminate the cause of the accident.

If your car is expensive to repair or replace, has a poor safety record or is a frequently stolen model, then you can expect high car insurance prices. But anything you do that makes it less costly to maintain, can save you money. If it has a high theft rate, you can install anti-theft devices and not park in high crime areas. Or if the car has a poor safety record, there's often a fix that will solve or reduce the problem.

The third factor in setting car insurance prices, is where your car is driven. Since most accidents happen in cities, rates are highest there. When moving is not an option, you can drive less by using alternate means of transportation. And because most cars are stolen off the street, if you can park in a garage, this can also lower your premiums.