Auto insurance rates with IFA Auto are determined primarily using these five key
factors. While certainly a person’s individual driving record and other unique elements
shape a premium, the 5 factors detailed below remain significant when purchasing
cheap auto insurance online. These primary factors include garage location, as defined
by population and auto congestion patterns, lawsuits resulting from personal injuries/death,
ever-increasing medical costs, rising car repair costs and insurance fraud, driving
history, insurance history, and claims data.
Whether you live in an urban, suburban or rural area plays a huge role in determining
cheap auto insurance premiums. The more densely populated an area, the greater the
number of accidents and resultant risks, which translates into higher premiums for
everyone. A case in point is New Jersey, the most densely populated state in the
U.S. Less populated suburban areas and certainly rural areas typically have far
lower insurance rates than metropolitan areas.
Lawsuits are another factor that increase cheap auto insurance rates. The tort system
has affected everyone’s premiums, with a notable increase since the 1980’s. Since
Insurance companies are required to pay defense costs for lawsuits, this burden
has affected rates across the board. Added to this dynamic are judgments, whether
frivolous or legitimate, in the area of ‘pain and suffering’ that have risen in
the last 20 years.
With medical costs increasing more than twice the inflation rate over the last two
decades, cheap auto insurance rates have certainly been affected. ‘Soft tissue’
injuries, in particular, often result in extended treatment, causing insurance companies
to pass on costs to those insured, in part because the financial burden to the insurer
Car Repair Costs
With more sophisticated cars comes greater expense to not only purchase and insure
them but also to repair and replace them when damage or loss occurs. Vehicle additions
that include enhanced technology such as airbags, fuel injection systems and computer
systems, with resultant costs to repair mechanical and technical parts, have dramatically
The National Insurance Crime Bureau calculates that insurance fraud costs property
and casualty insurance companies an estimated $20 billion dollars annually. This
is equal to 10% of claims paid out in the same category, which clearly costs everyone
in higher insurance premiums.