Why Auto Insurance Costs So Much ?

Insurers not only judge the people on their record but also on the records of people like them.

You have passed your driver's education course and scraped enough for your car. You take a deep breath and feel happy, until your agent tells you the rather large amount that will be added to your car insurance premium ... just to insure a lousy used sports car.

Sometimes we think that why can insurance sometimes cost as much as the car? Why are insurers so tough on kids, or Corvettes?

All this comes into one word: Risk.

To an auto insurance company, you are a collection of risks. Your sex, your age, your marital status, driving record, type of car and place of residence all such things contribute to an insurer's prediction of whether you will file a claim.

An insurance company don't know what type of driver you or your family member are. They only guess, based upon the statistics for drivers like you.Even if you are outstanding driver and happen to be young and single and own a sports car, the insurer is probably going to place you in a category of high premium - or it may reject you entirely.

The good news is that not all insurers price risks identically. While insurers are much operated in may states, they continue to operate as competitive businesses, focusing on certain markets and avoiding others.Some insurers operate their businesses more effectively than others, passing on the savings to consumers.That means now you can save lots of money by shopping regularly even if your insurer rewards long-time customers.