Everyone is looking to save a few dollars in this economy, so why not save on your auto insurance? In a minute I will show you how your premiums are determined. But first...

Insurance rates, Einstein and The Theory of Relativity.

Did you know that it took Almost 200 years from Sir Isaac Newton in 1717 until Albert Einstein in 1905 finally established his infamous, formula, E=mc2. Well what in the world does, auto insurance have to do with the theory of relativity? It comes down to this, you don't need to be an Einstein to understand how your vehicle insurance rates are calculated.

In fact, here are 11 ways an Insurance company figures out how much your premium will be. Some of these you may be able to do nothing about.On the other hand, there are quite a few you can make the most of. When you are done feel free to call an insurance agent so they can answer your questions.

1- Age: How old is the person driving? Common sense tells us that, new drivers have less driving time under their belt than others and so it will cost a little more for right now. The good news is that is only for a few years, because when you turn 25 your rates will drop significantly. If a driver is less than 18 years old they are too young to get their own policy. This means they will need to be listed under someone elses insurance plan. Once they turn 18 they can get insurance under their own name.

2- Sex: Are they male or female? Unfortunately male drivers will pay more because the statistics show they are involved in more accidents. Sorry about the bad news guys!

3- Next comes the Vehicle's information including year, make and model: I told you that you don't need to be an Einstein. it only makes sense that a new car will cost more to insure than an old car. On the other hand, a more luxurious car will cost more than a less expensive one, and a performance car will cost more than a sedan. Believe it or not, imported cars cost more to insure than domestic cars! If you want to save

the most money you can on insurance, try and pick a Domestic, 4 cylinder, 4 door sedan or minivan. If you want a 2 door red racing car then to be prepared to pay a premium for your premium!

4- Address: Did you know that your home address will affect your rates? Think about it for a moment, if you live in an area that statistically has more accidents, thefts and claims then your rates will be higher.

5- Annual miles to be driven: It only makes sense that the more you drive it the more chance of having a collision. On the other hand you will pay less if you do not drive it as often.

6- Deductibles: The higher a deductible you select, the lower your rates will be. So if you pick a $250 deductible, then be prepared to pay more than if you would have chosen a $1,000.00 deductable. This isn't rocket science folks, so if you are a good driver and have confidence in your ability to drive safely then go ahead and pick as high a deductible as you can afford.

7- Driving record: As discussed previously, teenage drivers will pay more for coverage because they have less experience driving. However, there are additional things that will cause your premiums to be increased. coverage. Believe it or not, the parents driving record will also contribute to how much the premiums go up. If the parents have tickets or accidents the premiums will be higher than if they had a clean driving record.

Remember that your driving habits are one of the biggest contributors to the cost of your monthly premiums. Make it a habit to be a safe and defensive driver.

In conclusion, shop around for the lowest rates. Every insurance company will have their own automobile insurance rate schedule. So it make sense to be a smart consumer and check your pricing. Just remember to compare apples to apples.

I've shared 7 of the 11 points here, go to our blog to read the rest of this article.