A premium is the amount you will need to pay every month to maintain an Insurance policy. It will be set by the insurance company based on many different factors. For cars, each company uses a variety of factors to determine how much each customer should pay. These factors are based on statistical analyses of safety, prices, and the probability that any given driver will need to claim benefits.

If you are looking for coverage for your motor vehicle, it is important to know everything that may affect your costs. You could be doing things that will cost you a lot of money in the long run without even realizing it. You also need to ask every agent you talk to about the formula his or her company uses.

Examples of Important Factors

It may not seem fair to be economically affected by statistical studies of other people, but that is Simply how it works. Remember, companies are simply trying to save money so they can turn a profit. A few of the facts or characteristics that may affect your rates include:

• Your vehicle. Studies have shown that people with sports cars tend to drive faster and more recklessly than other people. Thus, such cars are usually more expensive to insure. A car that costs more to repair, such as an import, will also raise your rates. Lastly, cars that are more likely to be seriously damaged in an accident, such as SUVs that may roll over, are also more costly.
• Your driving record. Previous traffic violations and car accidents will reflect badly on you - even those that were not your fault. In fact, even if an accident was caused in your absence by someone who borrowed your car, it will become part of your record. If you have no driving record because you have only recently obtained a license, this will also be counted as a negative by most companies.
• Your age and gender. Again, statistics show that drivers under age 25 and male drivers are more likely to take extra risks. If you are young, male, or both, you may have to pay extra for even basic coverage. Fortunately, you may also be able to reduce these costs by maintaining a good record and providing documentation of a defensive driving class.

It can be frustrating to know that factors beyond your control, or those that you were simply unaware of, can cost you more money. Fortunately, there are also steps you can take to protect your finances.