Top 10 Factors That Affect Your Car Insurance Rate
Posted By: Greg T. | Date Posted: Apr 22, 2021
People are often disappointed to find their car insurance rates vary drastically from those of other people they know. The way rates are calculated can seem like a complete mystery.
There isn’t an exact science to the way insurance premiums are determined, but there are a great number of factors you can review that affect your rate. All of these factors pinpoint how big of a risk you as a driver are to insure. The impact of these factors on the price of your premium can also vary for each insurance provider.
Here’s our breakdown of the top 10 factors that affect your car insurance rates, including both those you have control over and those you don’t.
1. Location
The most widely discussed factor that impacts car insurance rates is your location. It’s relatively common knowledge that Louisiana car insurance is more expensive than states like Nebraska.
This difference depends on multiple factors such as the number of claims in your area, the number of fraudulent claims, the rate of crime and stolen cars, as well as harmful weather that could affect your vehicle. Living in highly populated cities can make your rates higher as well compared to living in a rural area because accidents are more likely to occur where there is more traffic and the risk of crime.
2. Age
Age plays a major role in determining your car insurance premium. Based on statistics, teenagers are more likely to be distracted behind the wheel and cause an accident. Teenagers also have less experience driving, which makes them more of a risk to insure.
Rates generally decrease when drivers turn 25, especially if they’ve been driving for a longer amount of time and therefore have more experience.
3. Gender
Gender is another factor that affects your car insurance rate and is also based on statistics. Males are more likely to crash when they are younger and will pose more of a risk for an insurance company.
Gender differences that affect car insurance typically level out with age. When drivers enter their 30s, rates are closer in price.
4. Marital Status
Statistically, married drivers have been found to be less of a risk to insurers than those who are single according to auto accident data. Married couples also often receive discounts if they are able to combine their insurance policies.
5. Driving Record
Your driving record also impacts your car insurance premiums. Drivers with good records free from accidents can receive lower rates and qualify for more discounts.
Drivers who have an accident or moving violation on their records pose more of a risk to insurers and their rates are typically higher.
6. Claims Record
Aside from reviewing your driving record, your claims record is also important. Insurance companies will look at how many claims you’ve had as well as how many of those claims put you at fault to assess your level of risk.
7. Credit & Payment History
Paying your bills on time can help you have a lower car insurance rate. This can be based on both your credit history as well as your car insurance payment history, even if it’s with a different insurance company than the one currently giving you a quote.
8. Vehicle
Based on a number of factors, the type of car you drive affects your insurance premium. Certain models of vehicles have been in more accidents and have filed more claims, making them more of a risk to insure. Other factors that are considered when looking at the type of vehicle you drive include purchase price, theft rate, cost of repairs, accident rate, and safety tests.
Ironically, cars with extra safety and luxury features can cost more to insure because they cost more to repair.
When you’re shopping around for a new vehicle, take the time to receive insurance quotes for each model you’re considering.
9. Use of Vehicle
How much you drive and in what conditions is also taken into consideration in determining the price of your insurance premium. The less you drive, the less risk you have of being in an accident. This factor also ties into your location. If you spend time commuting into a busy metropolitan area, even if you live in a rural neighborhood, your insurance premium could be higher because of an increased risk factor.
10. Coverage Options
More coverage for your insurance premium will result in higher rates as well as having a lower deductible. Compare quotes and speak with agents at low cost insurers like GoAuto to see all of your options and understand what kind of coverage works for your budget.
Everyone wants the best price available for their car insurance. At GoAuto, we help you find that price, so you can stay on the road and have access to great coverage in case you’re ever involved in an accident. We have low down payments, flexible monthly payments, and we don’t push you to buy expensive add-ons. Give us a call today for your quote.
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Ohio: (216) 501-3322