A motor insurance quote indicates the monthly and annual cost of the premiums on your insurance plan taking into account the information provided by the potential policy holder and the experience and claims history of the insurer. The quote will depend on the type of driver you are, the vehicle you will be driving and the type of driving you will be doing.
The nature of insurance is to spread the risk, in this case the possible high costs of a future accident (or theft of the vehicle) by having all policy holder paying a lower monthly or annual amount. As only a proportion of the drivers will claim each year the insurance companies can pay those claims and still have a surplus (profit) from the premiums received.
All drivers are not equal and insurers will charge more where they consider the driver poses a greater risk. All this will reflect on the quote given and will reflect more than just your personal driving history so that you will often pay more and this will include paying for other people's poor driving records.
There are however ways to minimise the costs. It is widely accepted that younger drivers pose a greater risk in insurance terms. If you are a more mature driver your premiums should reflect this but if you insure with a company that does not offer cover to drivers under the age of say 25 you avoid any chance of being charged for their errors.
Another area is in company car or fleet car insurance. This refers to an insurance policy for a company or business-related automobile. Getting a motor insurance quote for a company car would normally involve more risk as company cars cover more miles and are often driven by a number of un-named employees whose driving experience cannot be directly included in the estimation of risk in driving a company car.
The company would also often require more insurance for a company car because, in the case of an accident, the liability does not only reflect on the driver but on the company as a participant in the accident. In addition additional cover is required for goods carried by the vehicle. Company car insurance therefore carries more risk and consequently has a higher premium than personal car insurance.
So long as you do not use your car for business purposes excluding business use from the cover will normally result in a lower quote but if available consider a company that does not offer fleet or business cover..
The insurance policies may also differ from state to state. Because of legislative differences between states motor insurance in one state may contain different clauses and conditions than insurance for the same vehicle, from another state. In addition driving conditions in one state may differ from another.
Michigan car insurance, for example, takes into account the type of driving vehicle will most likely be doing in Michegan. Insurance taken out in Alaska will reflect the likely driving and conditions in Alaska. In addition a policy for driving a car in a more rural or unpopulated area may cost less than one covering a car in a large town or city.
Another variable risk factor the make and model of the vehicle that the driver intends to insure. If the driver insures a vehicle that is considered to be a sporty, such as a Corvette or a Porsche, the premiums will reflect that vehicle. A Porsche or Corvette is considered a higher risk because it is capable of being driven agressively and at high speed. As a direct result there is an increased likelyhood of an accident and therefore increased premiums are charged.
The premiums for driving a station wagon or a smaller compact car would likely be lower because of the lower risk associated with driving such a car. The premium also takes into account the resilience of a car in an accident and how that protects the driver or any passenger. Therefore cars that are known to have a strong frame or better safety features carry a lower risk and therefore the premiums for these "safer" cars are often considerably lower than for those considered less safe.
There is however a flip side to this. A car known to be strong, solid and secure for its occupants can be more dangerous to another vehicle or to persons crossing or walking at the side of the road. This increased risk will also be taken into account.
In determining car insurance quotes then, there are a number of factors to be considered. Car insurance companies take these all these risks and factors into account when they consider the rates and the premiums of your particular plan so that your particular plan matches up with you as a driver and with the type of driving that you plan to do.
One final consideration: Because there are many factors it is essential that you answer any questions asked honestly and in full. If you avoid giving a true answer or you answer a question incorrectly then, in the event of a claim, the insurance company will void the policy, often even if the incorrect answer was not relavant to the claim. You must fully answer all questions asked but if a question is not asked then, generally, you do not have to volunteer additional information.
Graham Johns spent many years in finance and insurance and now regularly contributes to a number of web sites on a range of topics including car insurance and online motor brokers
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