One should remember that like there are many rules to follow while driving out your car, it is mandatory for every person driving a car to have vehicle insurance. But, many people find that paying for insurance is very dear and feel that they are being taken for a ride by insurance companies for the amount that they are being charged every year although they do not know how to go about with car insurance calculation.
This is so because different people are paying different premiums on their insurance although many of the characteristics of the people might appear similar. For example, the make and model of the cars that two people are driving might be the same but still the insurance paid by one person might be higher than what the other is paying leading to confusion and frustration.
One must remember that insurance companies take into consideration several factors while they are determining how much a person should pay for the annual car insurance they are taking. Some of the factors that insurance companies bear in mind while calculating annual premium costs include the age of the person, previous traffic records, previous safety records, etc.
The age of the person is a huge factor in determining the annual amount you are paying towards car insurance as insurers will deem younger people more likely to cause mishaps as they do not carry the years of experience that an older driver does and also consider them to be more hasty and drive recklessly posing a higher risk. Therefore, the amount paid out by a younger driver will be much higher in comparison to what an older driver will be paying out.
Also, it becomes easier for insurers to determine safety records of older drivers as they can see their previous driving history while this cannot be determined in a younger driver. This enables insurance companies to provide no claims bonuses to older drivers thus reducing the amount paid out by an older driver while this cannot be doled out to a younger driver as they do not have a significant history as yet in driving.
Insurance companies will also look at traffic misdemeanors that one has committed and has been booked for while determining the premium paid out. They consider a person with a history of several bookings under various traffic misdemeanors as risky for the insurance company and is likely to charge a higher premium than what a person with lesser traffic offenses will pay out.
Even factors like where the car is usually parked also plays a role in determining the premium that you are paying. This is so because insurers will consider a car parked in a basement or a garage as a safer option to a person parking a car on the street. This is the reason even such data is collected prior to the insurance company providing a quote for your insurance for your vehicle.
If you are still not very clear about how calculations for insurance of your vehicle is done, it is best to go online and check on various sites that are available to help you out. All you need to do is provide the data that the sites ask for providing you the quote and the sites will provide you with a list of quotes from different companies so that you can choose the best option for yourself.