What Is A Car Insurance Premium?

Your car insurance premium is the amount of money you pay to an insurance company for active coverage. This amount can vary widely based on several factors. Always check with your local Independent Agent first. He can help you compare car insurance premiums and help you decide on the best policy for you. Paying a smaller premium isn’t always better. Paying less often means you’re getting less coverage. Adjusting your policy based on coverage is one way to affect the cost of your premium. Simply put, the more coverage you have the higher the premium you pay. If you want a low deductible you will be paying a higher car insurance premium. If you opt for full coverage instead of basic liability, you will pay more. There are many features in an auto policy that will affect your premium, but policy features aren’t the only thing that can affect what you pay for your car insurance premium.

Statistical Factors Affecting Your Car Insurance Premium

The cost of car insurance premiums is also based on statistics that the individual driver cannot control. Individual history is a small factor, but statistics are the overriding factor for the cost of a car insurance premium. Let’s take two factors in the following comparison: the driver’s age and the type of car. First, let’s look at a 21 year old driver seeking car insurance coverage on a red sports car. He is a young driver, which statistically increases risk for the insurer. Add in the red sports car, another risk factor. Both affect his car insurance premium. Statistically he will be paying a lot more for his car insurance than a 47 year old driver of a 4-door sedan.


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