Factors that Affect Your Car Insurance Rate

There are many factors that may affect the price you can expect to pay for auto insurance.  An auto insurance quote is geared for a specific person, and their specific risk factors.  If you have a high number of these risk factors, you will pay a higher price for your car insurance.  Examples of these risk factors include age, gender, marriage status, miles driven per year, the purpose the vehicle is used for, and many other factors.

Understanding how insurance companies evaluate risk and the cost of car insurance is important to properly compare insurance costs and determine the appropriate vehicle coverage policy.

Coverage Type:  The type of coverage is a factor that car insurance buyer will choose within the limits of the specific state requirements.  It is important to understand how significant the type of coverage is not just for how it will impact a particular car insurance rate but rather how competing car insurance rate quotes may vary based on different levels of coverage. 

The more coverage you have, the greater your insurance costs become.  Liability, collision and comprehensive, fire, theft and vandalism are among the most popular options.  By law, car owners are obliged to have liability coverage, but anything more is all up to you to decide whether it is necessary or not.  It is important to wisely weigh your options often regardless of the insurance cost changes.

Age:  If you are under age 25, you can expect to pay a higher rate for your auto insurance.  Statistically, drivers under age 25 have the greatest chance of being in an accident, while drivers aged 50 to 65 have the safest driving records.  Generally, when you reach age 25, the rate you are paying for auto insurance will decrease.

Gender:  Women generally pay lower rates for auto insurance than men, as they are statistically safer drivers.

Marital Status:  Those who are married have lower auto insurance rates than single individuals with the same driving records.

Geography:  People living in rural areas, with lower traffic volume and therefore lower potential for accidents, often have lower car insurance premiums, as well.  Those who live in congested areas with many accidents have a statistically greater risk of being in an accident, and will pay a higher premium for their car insurance.  If you live in an area with a high risk of vehicle theft, your auto insurance premium may also be higher.

Moving Violations:  Accidents or moving violations such as speeding tickets or reckless driving charges will mean a higher premium.  This premium may stay in effect for up to five years after the violation.  As your driving record improves, however, your premium will decrease.  Accident claims also raise your insurance premiums, as well.

Vehicle Type:  Cheaper family cars and sedans cost less money to insure than luxury cars, SUV’s, or expensive sports cars.  Consider the value of your car when you are assessing how much you want to pay for your insurance.

Credit Rating:  The better your credit rating, the better a risk you seem to your insurance company.  Keep a close eye on your credit rating, as it can affect the rates you pay for auto insurance.

Occupation and driving distance to work:  If you use your vehicle for your job or are driving a great distance daily, you may be viewed by your insurance company as a higher risk, leading to higher insurance premiums.

Other factors that can affect your insurance premiums are:  education, the number of miles driven each year, the years of driving experience you have, and whether there are multiple cars or drivers in your family.  Each of these factors can raise or lower your car insurance premiums.

When shopping for car insurance, be sure to take into account all the factors that can raise or lower your rates.  Be prepared with documentation of your age, marital status, driving record, education, and occupation, so that you can get the best rate possible.  Doing your research and comparing rates will allow you to get as many discounts as possible, and help you to get the best car insurance rate for your hard earned money.  Always, shop around and compare car insurance quotes from different insurers.