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Factors That Affect Auto Insurance Rates

In the state of Texas, having minimum liability insurance is a must to operate your vehicle on the road. A new financial responsibility law in was passed in April of 2008, mandating certain auto insurance requirements in Texas.

With this new law, it is a requirement that you buy a certain amount of liability insurance. The minimums are: $30,000 for each injured person, up to a total of $60,000 for all injuries per accident and $25,000 for property damage per accident.

Tips to save money on required auto insurance

When you buy auto insurance in Texas, you must keep in mind that there is no fixed price. Rates vary among companies and it is always a smart idea to shop around. Make a note of the following tips on how to save money on auto insurance and find the best deal for you and your family:

• Before approaching companies, you need to know what you want. So you must decide before shopping what coverage you need. There are several types of coverage to choose from.

• If financially feasible, you can choose a higher deductible. This refers to the amount you have to pay in case of an accident, before the insurance company will pay their portion. Experts advise to have higher deductibles so that the monthly premiums will be lower. Only opt for this if you can afford to pay the deductible amount from your pocket after an accident. This is also a motivator to drive more safely. You are betting your higher deductible amount that you won’t be at fault in an accident.

• Approach a number of licensed insurance sellers in Texas and get price quotes from them. Always get the quotes for the same coverage policy so you can compare apples to apples and not apples to oranges. With the internet there is no longer a need to call or physically visit insurance providers. Simply enter your zip code into the insurance comparison quote portal on this sight and follow the directions. In less than 10 minutes you can compare quotes from up to 8 well known nationally recognized insurance providers.

• Be truthful in answering questions while getting a price quote for auto insurance. This is critical because, with wrong information, you can get an incorrect price quote or it could lead to a denial or cancellation of coverage when you need it most.

• Never choose an insurer just on the quotes they offer. You must consider factors like the company’s financial rating and stability, complaint index (to judge its customer service), and license status (must be licensed to sell in Texas). The odds are that if they advertise in Texas – they are licensed to sell insurance there too.

• Visit the government resources and the Texas Department of Insurance to learn more about a company, its license status, complaint history and financial rating.

Now, the state of Texas requires insurance rates to be reasonable not prejudiced. But rates vary with different companies as they each use their unique formulas to calculate monthly premiums. There are definitely certain factors you should be aware of – as they affect your premium – and you can work on them to get affordable quotes.

These factors affect insurance rates

The factors that affect the company’s decisions while establishing premiums include:

• Age and marital status- If you are a male and under 25 and unmarried, you are high risk and your premiums will be high. If you are a woman under 21, you will have the highest rates. If you are over 50 years of age, you will get good discounts for being an experienced driver.

• Your driving record and claims history. A good driving record makes you a lesser risk, hence lower premiums.

• Your address and car type- Where the car is parked overnight (accident or auto theft prone areas mean higher premiums) and what is your vehicle type is also makes a difference. Collision and comprehensive rates are high for luxury, high-performance, and sports cars. High repair costs also increase premiums.

• Your credit score- If you have a respectable credit, the companies will be reassured that you will pay regularly and hence you’ll receive lower monthly premiums.

These are some factors that affect the rates of your Auto Insurance. TX has many providers and you must choose one very carefully.

TexasAutoInsurance provides a leading insurance comparison portal serving the residents of TX. Auto insurance quotes from top insurers are available here and can be completed in less than 10 minutes.