Car Insurance Calculator

Calculating Your Car Insurance

Car insurance is typically the third highest expense that any motorist will have to incur as part of owning a vehicle (only car payments and gas costs are higher). Therefore, saving on coverage expenses will help any vehicle owner keep more money in their pocket.

Insurance costs can be particularly burdensome for high-risk drivers and drivers with bad records. For example, if you’ve accumulated speeding tickets, have a DUI, or a rich history of traffic violations; you may particularly face high car insurance costs. The good news is that you can still save money when looking for an auto insurance plan with a bad driving record. It all comes down to shopping around, comparing multiple quotes, and taking advantage of discounts.

One of the tools that you can use to get the best available deal is a car insurance calculator. These intuitive calculators consider your driving record and compare it to many different packages offered by insurance companies. Through a few clicks, you can quickly find a reasonable package for your auto insurance needs.

How the car insurance calculator works

By definition, a car insurance calculator is an online tool that allows you to identify the best available policy. It compares your driving record (and other relevant information) to policies being currently offered in the market. This online tool can sift through many different quotes from insurance providers simultaneously. Therefore, the calculator saves you time and money by automating the insurance search process.

After you insert your details, you will receive a comparison of quotes from multiple companies. Some of the information you should be prepared to share include:

• Your overall driving profile (and driving record)
• Demographic information
• Where you live (or the state where you’ll be driving the vehicle)
• The type of vehicle you own

For drivers with bad records, a car insurance calculator helps them save significantly on costs. This is because the tool can help you identify unique discounts from auto insurers that are willing to provide coverage despite your driving history. Furthermore, some companies also design policies specifically for high-risk drivers.

The challenge you may experience is how to locate those policies within a large pool of auto insurance plans. A car insurance calculator allows you to single out these coverage options and to save on costs in the process.

What goes into calculating premiums?

Car insurance calculators essentially compare the premiums that you would pay across many different auto insurers. Therefore, the calculator first needs to determine how much (in premiums) you’re likely to pay for a specific coverage plan.

There’s a lot that goes into calculating premiums. Every insurer will closely examine your complete driving profile to assess how much risk you may pose when receiving coverage. Some of the factors that will be considered include:

1. Your driving record

Your driving record refers to your history of operating a motor vehicle in the country’s roads. This record will contain any previous violations such as speeding tickets, non-moving infringements, DUIs, hit and runs, etc.

When an insurance company is evaluating your driving record, they will essentially rank your previous violations by severity. Points are typically assigned to each incident, with more serious ones (such as DUIs and reckless driving) accumulating more points than minor speeding tickets.

2. Demographics

Auto insurers also factor demographics into their pricing policy. They will consider your age, marital status, credit score, gender, and personal assets before providing a quote.

Demographic information is often used to model a driver risk profile. For example, younger drivers are typically viewed as being of higher risk than older, married motorists. Similarly, drivers with a low credit score and a history of violations may end up paying higher premiums than those with excellent credit and multiple personal assets.

3. Location

Location is another important factor that influences premium costs. Location is so critical that most car insurance calculators will start off by asking you where you live.

But why does location matter? Primarily because individual states are responsible for regulating coverage. Your state of residence will set minimum coverage options, including the benefits that you may be entitled to if you file a claim. This is why premiums vary significantly by state, with Michigan having some of the highest premium costs (being a no-fault insurance state).

4. Your vehicle

Auto insurers are also typically responsible for repairing or replacing damaged vehicles after an accident (depending on your policy). Therefore, more expensive vehicles will cost more to fix/replace, which in turn results in higher premiums.

How a calculator can help you save on costs

Because of the many different factors that go into calculating premiums, you need a tool that will help you compare many different rates at once. Each insurer will use a slightly different algorithm to assess your level of risk, driver profile, demographic characterization, and even vehicle valuation. And with all these factors in play, you’ll receive a slightly different quote from every insurance company that you approach.

In the case of drivers with a poor record, comparing rates will be even more critical. Most insurance companies will hike your premiums once they find a history of grave traffic offenses such as DUIs, car racing, or over speeding. Therefore, shopping around diligently will be key to securing a competitive rate.

Car insurance calculators allow you to compare hundreds of companies at once, thus identifying cost saving opportunities. The tool will use your driving record information to obtain multiple quotes and explore discounts or additional savings opportunities.

You will find that violations that happened many years ago, a recently clean driving record, and prompt payments may result in lower rates for high-risk drivers.