Auto insurance is often a sticky subject. Everyone feels like theyre paying too much to insure their car, and wants to know how to get their premiums down. Its an industry that really lacks an effective way to make price comparisons, leading many people to switch every few years the way they do with credit cards or phone providers.
When you understand the factors that go into deciding the price you pay for auto insurance, however, you should find it much easier to read the market and use it to your advantage. This article should give you a basic grounding, but whole books have been written on the subject its up to you how much you want to learn.
The most basic thing you need to understand is that insurance companies dont decide premiums based on how much they like you, or how much they think you can afford. Insurance is based on one thing, and one thing alone: risk. Every time the insurance company has to pay out for an accident, they keep a record of the amount, and every other factor they can find the make, age and model of the car, the age and gender of the driver, where they live, how long they have had a license, and so on. There are hundreds of...