When NM auto insurance carriers are setting rates for their policyholders, they consider a number of factors. The reason why rates vary depending on the customer (and the company preparing the quote) is that insurance companies base their rates on the level of risk that a driver presents. Low risk car insurance buyers pay less for their coverage than people the insurance company has deemed to be more likely to make a claim against their policy.
An auto insurance company can and will pull an applicant’s driving record when determining whether to offer coverage to a particular driver. A person who has a history that includes one or more accidents or moving violations will pay more for his or her coverage.
Along with driving history, auto insurance providers in NM also ask about the vehicle that the driver wants to insure. Companies are aware of the average cost of repairs to different models, and they factor them in when they are working up pricing for policyholders. People who want to insure a sports car will be paying higher rates than those who are driving a more conservative vehicle.
Location is another important factor when setting rates for auto insurance coverage. A person who lives in an urban area where there are a lot of cars on the road and a higher probability of being involved in an accident will pay higher rates for coverage than an individual who lives in a rural area.