Free Article For Reprint

Have you ever wondered why your car insurance costs as much as it does? More importantly, have you ever wondered what, exactly, the car insurance companies do to come up with the number they slap on your monthly bill? Believe it or not, your insurance agent isn't just pulling a number out of a hat. Your insurance premiums are the end result of a complicated (and fairly sophisticated) process, and once you understand how that process works and why your insurance costs as much as it does you've got all the tools you need to pave the way to cheaper car insurance.

The first thing any insurance agent is going to look at when they're determining how much you're going to pay for your insurance coverage is exactly how much insurance you need. How high are your liability limits? How much does your car cost? Do you want to add on medical insurance or emergency roadside assistance? You'd never walk away from WalMart expecting to pay the same amount of money for a pack of gum as you would for a sophisticated gumball machine for your living room. The same philosophy applies to your car insurance.

The next thing to consider is where you live and how much time you spend on the roads. When you live in a city like New York or L.A. you're going to be spending hours a day driving on congested roads, especially if you're a commuter. The more time you spend with drivers suffering from acute hunger and road rage the greater the chances are that you're going to be in an accident (especially if you happen to be one of those drivers). On the other hand, if you live in Mayberry and never drive more than 10 minutes from your house you're probably a pretty safe bet in the eyes of your car insurance provider.

How big was the check you cut to buy your car? $10,000? $20,000? The more expensive your vehicle is the more it's going to cost your car insurance company to replace-and the more it's going to cost you to insure. Of course, price isn't the only thing car insurance companies look at. They're also going to want to know what kind of safety and security features it has, where it's parked at night and how much mileage it has on it.

Finally, what does your driving record look like? Are you on a first name basis with local law enforcement or would they not be able to pick you out of a line-up? Statistics show that drivers with multiple traffic offenses to their name are more likely to be involved in a second accident, and it's hard to argue with statistics. The minute you receive a ticket, or are responsible for an accident, your car insurance rates are going to go flying up faster than the old man's house in “UP”. It pays to keep your nose clean when you're out on the highways.

These are only a handful of the things that conspire together to raise the rates on your car insurance-but they aren't the only things. Keep your driving record clean, and remember to talk to your insurance agent about the discounts they offer. It won't be long at all before you're enjoying the high quality car insurance you deserve at a price you can afford.