As an Independent Insurance Broker in Illinois one of the things that I am asked the most is how does the insurance company come up with that premium? Actually there are a number of things that can affect your premium that most people don't give a whole lot of thought to.In our current economy it is important to make sure that we are getting the best value on whatever we spend our money on and auto insurance is no different.The first thing that any insurance company will look at is your driving record. This should not be a big surprise to anyone. What this will tell the insurance company is how much of a risk is it for them to insure you. The insurance company will look at a number of things like accidents (at fault or not at fault), any driving violations and claims made against your vehicle in the last few years. Obviously the better driver that you are, the better rates you are going to get. There are a couple of things that you can to do help yourself out. Consider paying for the small claims yourself. Claims like hail or maybe a cracked windshield can cost you some out of pocket money but it will save you in the long run as your premium increase will last a lot longer than the small amount you paid.The second thing an insurance company will look at is your credit history. This one surprises a lot of people. The insurance company wants to know if you pay your bills on time and what your credit use has been like in the past. Just as you can be penalized with a higher premium for not having the best credit score you can be rewarded with a discounted premium for having a good credit score. Your credit is something that you should protect whether it is for insurance or any other purchase, so whenever possible pay your bills in a timely manner and honor your financial commitments. You would be surprised at how easy it is to mess up your credit and how hard it can be to fix it.The next factor that an insurance company will look at is where you live. This also surprises a lot of people. Insurance companies find that if you live in a larger city setting there is a greater chance of accidents and thefts versus if you live in a suburban area. The insurance company can charge you a higher premium for living in a more congested area, however by parking your car in a garage or carport you can be eligible for some discounts to help offset that.The next factor surprises some people as well. The type of car you drive and how you are using it. Did you know that in some instances it costs more to insure a brand new car versus a used car. Why is that? A new car will cost more to replace than a used car. You can help offset this by making sure that your agent is aware of all safety devises on your new car, like airbags, etc. The insurance company also wants to know how are you using your car and how much are you driving it. Try to remember the more you are driving you car the more chance you have of being involved in an accident.Hopefully this will give you a better understanding of what the insurance company is looking at next time you are looking for new auto insurance.
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