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Common Cents departments
Nov/Dec 2011 Issue

What really drives your auto insurance premiums?

The type of car you drive may say a lot about you, but it’s not the primary factor driving the rate of your insurance premium. Insurance companies look at three main factors when determining your rates.

“Driving-safety record, insurance score that’s based on credit history and a driver’s age. Those are the common factors insurance companies use to calculate premiums,” said Robert Schreiber, vice president, AAA Insurance.

But other factors also play into the cost of insuring your vehicle, including the type of car you drive. You may look great driving a Chevy Corvette, but you will pay more to insure that vehicle versus a family four-door sedan. A Corvette is considered a high-performance car and they are the most expensive to insure. Drivers often speed in fast cars, making crashes more likely–at least in the eyes of your insurance company.

Let’s say you are involved in a crash. How well your car can survive an accident and how expensive repairs would be also affect the vehicle’s insurance premium. A Toyota Camry will be less expensive to insure than that snappy Corvette. Safety features, such as anti-lock brakes, can also be used in determining insurance costs. Many insurance companies offer discounts for safety features, including air bags and anti-lock braking systems.

A popular myth that’s tossed around in conversations about car insurance is color, but this is not a factor in determining premiums. So which cars are the least expensive to insure?

“That’s difficult to answer in generalities,” Schreiber said. “It depends on a range of factors, including purchase price and type of car.”

AAA Insurance can offer you a free, accurate insurance quote by calling 1-888-428-8625 or clicking AAA.com/insurance.

Safer holiday shopping

According to a study released by IBM Coremetrics, “Fourth Annual Online Retail Holiday Readiness Report,” people are shopping online more than ever (7.5 page views per session with an average time of almost seven and a half minutes on site).

If you plan to do much of your holiday shopping using your computer and not your car, rest assured that the AAA Member Rewards Visa® credit card is one of the safest ways to handle seasonal finances. Should the card be lost, the cardholder makes one phone call and a representative will immediately block the account against any abuse and then send the cardholder a new credit card in the mail. Customer service is available 24 hours a day, 365 days a year.

Shop with security, track expenses and knock out that holiday gift list with ease. For rates or to apply, call (866) 665-3581 and mention code UABLSO.

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