Whether you shop online or use an agent, buying an auto insurance policy is complicated. While the internet makes it simple to compare policies and rates, it’s still easy to get confused by all the unfamiliar terms insurance companies use. The decision-making process is also clouded by misconceptions about how insurance works.

Insurance companies consider a lot of factors about the vehicle when setting their premiums, including the make and model, age, body type, engine, the cost to repair and the likelihood of being stolen. Here are things you should know about auto insurance.

How Prices Are Determined

You want to work with a cheap car insurance, and it is only possible if you know how prices are determined. Each insurance company has its own formula for calculating premium prices but they all tend to use the same basic factors. These include the obvious ones such as the make and model of the car, how you use the vehicle and you’re driving record. Other factors that go into the mix include: your age, gender and marital status.

Statistics shows that young drivers with less experience and male drivers are more likely to have an accident. Married drivers on the other hand are less likely to file an accident claim. Where you live is another factor that determines your insurance price. Someone who lives in an urban area with high crime rate is likely to pay more unlike someone who lives in a rural area.

Personal Auto Insurance Doesn’t Cover Using Your Vehicle For Business

Most policies exclude driving a personal vehicle for business purposes. In fact, most companies will cancel your policy if they discover you’re doing this. People need to be aware that if they do any kind of size gig, pizza delivery, messenger or ride-share driver, they need to make sure they are covered. Talk to your insurance company about getting an endorsement to that business driving.

Final Thoughts

So, these are some of the simple things you need to know about auto insurance. If you want to get the best policy, pay attention to online reviews. This way, you will be in a position to decide on the quotes you want.