First Time Drivers: Factors That Influence Your Insurance Premium

When you purchase car insurance for the first time, you are going to be asked a wide variety of questions by your insurance agent. Even if these questions do not seem related, they all serve a specific purpose. They help your insurance company determine the risk associated with offering you insurance, and helps determine the premium or rate that you will pay for insurance coverage. 

Type Of Coverage You Choose

One of the biggest factors that will ultimately influence your overall premium is the type of coverage that you choose to purchase. 

If you purchase the bare minimum for your state, you will pay a lot less than if you stack up on optional coverage. However, some of that optional coverage can actually save you money in the long run such as collision and comprehensive coverage, which will cover any damage to your vehicle regardless of who is at fault. 

Before you add on coverage options such as rental reimbursement coverage and emergency roadside assistance, make sure that the cost that those options add on to your coverage is worth the amount of money you'll pay.

Your Driving Record

Next, all insurance companies will inspect your driving record before offering you a premium. As a first time driver, you should not have any accidents or tickets on your record to drive up the cost of your insurance. 

However, your sheer lack of experience may drive up your first few premiums. Due to your inexperience on the road, most insurance companies will consider that a risk factor. 

Your Vehicle

You should think carefully about what type of vehicle you purchase and use when you start driving. Your insurance company will consider a wide variety of factors when looking at your vehicle.

To start with, they will look at how much it will cost to repair and replace the vehicle if it is damaged. The more it will cost to work on or replace the vehicle, the more you can expect to pay.

Next, they will look at your vehicle's overall safety rating and look into what type of safety features are installed on your vehicle. The greater the number of safety features on your vehicle, the lower your premium may go. 

They will look at additional factors such as the rate at which this vehicle is stolen and the risk your vehicle has of being stolen based on your address. 

Your Personal Information

Finally, most auto insurance companies use a host of personal information to determine how risky you are to insure based on internal calculations and research information. They take into account such factors as:

  • Age
  • Gender
  • Education Level
  • Occupation
  • Credit Score
  • Home Address
  • Miles Driven Per Year

Remember, when you talk to your auto insurance agent, each question they ask you helps them gather information on risk factors that will ultimately determine what type of premium they offer you. Insurance companies look at multiple facets of your life, from your driving record to the vehicle you drive all the way down to your credit score when determining your insurance coverage premium.