Factors that Determine the Calculation of Auto Insurance Quotes

Factors that Determine the Calculation of Auto Insurance Quotes

As a vehicle owner, you will want to compare among different auto insurance quotes to find the one that has many features covered in the policy and within your budget. Each insurance provider has a unique policy and therefore different rates. However, to design each policy, every insurer takes into consideration a number of factors. These factors are more or less similar across all insurance companies.

They include the following.

Auto insurance laws of state your vehicle is insured in
Each state has its unique set of laws with regard to car insurance. These laws group a state within one of three main categories. They are as follows.
Tort states' auto insurance laws require that one party involved in the accident be identified as the one at fault. This way, a suit can be filed in court to compel the party at fault to pay for damages incurred during the accident. Majority of the states fall within this category. Vehicle owners seeking insurance coverage in these states often get lower rates compared to the other states.
No fault states' car insurance laws require your insurance provider to compensate your for damages incurred during an accident regardless of which party was at fault. However, you insurer will only compensate you up to the amount stated in the insurance policy. In addition, the law prohibits you from filing a suit in court against any other party involved in the accident. However, insurers are permitted to file suits in court against each other to recover amounts paid to their clients if they find it necessary.
Add on states' laws are a hybrid of the no fault states. In these states, your insurer is required to compensate you for damages incurred in the vent of an accident up to the policy amount. In addition, you are allowed to file a suit in court against the other party involved in the accident and vise versa.
Environmental factors

The environment is one of the factors which increase or reduce chances of auto accidents. Fortunately, auto insurance policies also cover common environmental factors such as hailstorms, flooding and even earthquakes. This however doesn't mean that all policies covering environmental factors will be the same. In states where accidents usually occur because of any environmental factor, the auto insurance quotes will usually be higher. The reason for this is that insurance companies want to cushion themselves against the high claims that they might have to compensate in cases such as flash floods which can affect dozens if not hundreds of their clients within a short period.


Vehicle theft and vandalism are among the risks covered in most car insurance policies. Some insurance providers tend to avoid areas with security issues and especially those with high incidences of auto theft. For companies offering quotes to people using their vehicles in high crime areas, the premiums are usually higher than those charged for vehicles being used in low crime areas. However, you can negotiate for a cheaper rate if you take measures to make your vehicle more secure. Some of the ways to make your vehicle more secure include installation of tracking devices and ensuring your vehicles security at home by keeping it in a locked garage and installation of surveillance cameras in the home.


Heavy traffic areas are prone to high vehicle accident incidence. If you want to insure your vehicle for use in heavy traffic roads and large cities, chances are that your insurance premium rates will be higher compared to those charged to someone whose vehicle is used in rural areas.

Economic factors

A failing economy hurts everyone. Most insurance companies find it necessary to adjust their policies in order to remain in business during a low economy. It might mean lowering rates to attract more clients and offset the rising auto insurance claims. It might also mean increasing rates and risking losing their clients to other insurers offering more favorable insurance terms.

Putting it all together - the insurer

Although all the mentioned factors come into play when determining the auto insurance rates you'll pay for your car, everything boils down to the insurance provider. That is, after taking into consideration all these factors, how well does the insurer come up with a favorable auto policy that is affordable and beneficial to you. Many will try to create a generic policy which covers all vehicles therefore minimizing their risk. However, it's also possible to find affordable auto insurance quotes which are tailor made to meet your specific needs.

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