Why My Car Insurance is Expensive?

Car insurance is an essential and unavoidable expense. It is mandatory that the car owner have insurance coverage as its legal requirement in most states. Getting car insurance is not only a daunting task, but can also be expensive, sometimes very expensive.

What Makes Car Insurance Expensive?

In times of economic crisis, the price of some basic commodities like electricity and gas are rising constantly. The rising prices are affecting the insurance companies as well and consequently the car insurance premium rates have also become expensive. According to financial experts, the insurance rates are set to grow higher.

If you are a teen driver of less than 25 years of age and you are considering buying insurance, it may cost you a hefty amount to get covered.

Another reason, other than the rising prices that has made car insurance expensive, is that the money that floats in the insurance company has to be paid out to cover personal injury claims. This money spent on covering personal injury claims has a significant impact on insurers. To cover the cost spent on claims, the insurers charge higher rates for your car insurance. It is a vicious cycle that goes on and on.

Your car insurance can become expensive if you have a bad driving record. If you are charged for speeding, the insurer sees this as a chance to charge you more for the insurance. For them, you are a vulnerable driver and the chances of getting into an accident are high.

The kind of car you drive also has an impact of your insurance rate. The more expensive the car is, the more expensive your insurance will be. Not only does the cost of the car affect the insurance rate, but other factors such as the size of the engine and the easy availability of spare parts.

Apart from the above-mentioned factors, the insurance rates are also more expensive for men than women. It is strange, but true, that most Car insurance companies charge more for men’s insurance than for women. This is because most insurance companies may be of the opinion that it is the men who drive the car when a couple commutes. Another reason is that men statistically tend to spend more on the road than their female counterpart, while women often make short distance journeys.

The fact, however, is that, statistically, the majority of people involved in accidents are men. The insurance companies consider these statistical data when they determine premium rates.

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