10 Factors that Affect Car Insurance Rates

If you want to save money on your premium you’d better pay close attention to factors that affect auto insurance rates and see if you can turn them around to help you. Vehicle insurance costs are expressed as simple looking numbers. However, there are many details considered and complicated calculations carried out before arriving to those numbers. 10 key car insurance factors and how you can improve on them are discussed below.

  1. What You Drive

Everything starts with buying a car and that is when you should start worrying about auto insurance costs. You can easily end up paying twice more for insuring your vehicle if you choose an expensive car to insure. Every automobile has its own insurance rating that tells you how expensive or cheap it is to insure it. There are many reasons as to why one automobile can be much more expensive to insure than the other.

The obvious reason is that insurers have statistically paid a lot more claims when they insured certain cars. In the same way, certain types of cars are known to cause fewer accidents, less injury and not stolen very often and that is why insurers don’t charge much to insure them.

  1. Your Coverage and Deductibles

This is self-explanatory. The more coverage you want the higher premium you pay. However, you shouldn’t make the mistake of paying too much attention to it at the beginning because this may lead to underinsuring. If you know how to search for cheap car insurance quotes you can get a full coverage policy that is cheaper than a simple liability only policy. This doesn’t mean that you should keep loading up your policy with covers that are neither cheap nor essential. Generally, you will get the best prices if you buy a standard cheap full coverage auto insurance policy. When you start adding special conditions and endorsements on policies prices can start getting expensive.

Probably you should be more accommodating when it comes to deductibles by accepting higher figures. A few insurers like to push up the deductibles in an effort to cut out small claims and they offer cheaper quotes in return. In other words, higher deductibles would usually mean lower car insurance costs per month.

  1. Your Driving Records

There are three main components to your driving records. The first one is how long have you been driving. The longer is the better for the purpose of assessing your driving abilities. Secondly, recent accidents are pretty good indicators for future claims. You can find out how much does insurance go up after an accident? Most insurers look at last 3 years of claim history. If you have at least 3 years of claim free insurance history you can get about 20 – 30% discount with most insurers. As a general rule, drivers who caused accidents must pay higher premiums than careful drivers.

The third component in your record is traffic tickets. You can read the answer to how much does my insurance go up after a ticket? The higher the number of traffic convictions the more you pay for vehicle insurance. So, you should make sure you find a way to avoid points on your license.

  1. Your Credit History

Most insurers in nearly all states check your credit history before they confirm your premium quote. It is largely believed that people with poor credit score are more likely to make claims. People with good credit aren’t keen on making a claim, especially when the losses are small. That is why insurers are prepared to offer as much as 20% discount for good credit (similar amount as no claim discount). That is why you should read this post titled how to improve credit score and car insurance rates.

  1. Where You Live

Where you live affects your auto insurance costs in two ways. First of all, your zip code contains so many details pertaining to demographics of your neighborhood. One of the most influential car insurance factors is state insurance laws and regulations since each state has their own rules. For example, the same driver may have to pay twice higher premium for living in New Jersey in comparison to living in New Hampshire.

Secondly, living in your own home may enable you to get homeowners auto insurance discount, which is not available to renters. They usually ask but you should always mention if you own your home.

  1. Your Vehicle Use

Needing your car for a daily commute or long trips across state lines would mean that your yearly mileage is going to be affected by those commutes and trips. Generally, the more you drive the higher your premium gets. You should inform your insurer if you are retired, taking public transportation to work or driving less than usual for whatever reason because there is a high chance you can save money.

  1. Your Age and Gender

Naturally, there aren’t many discounts a teenage driver can get. By definition, they don’t have much driving or even credit history. They are inexperienced and susceptible to making wrong decisions. As you pass these difficult driving years gaining more and more experience along the way you start getting better rates. Read this post if you are asking when does car insurance go down?

Gender is another auto insurance factor that is well known. Ladies usually get lower quotes, especially in the early years.

  1. Other Drivers on the Policy

In most cases, you will need to include the drivers living in your house as listed drivers on your policy. You may be able to specially exclude them if they have their own vehicle and insurance. If you want a policy that allows any occasional driver you may pay for it knowingly or unknowingly. Some insurers allow policyholders limit the drivers to only the listed ones in return for lower car insurance rates. This is especially effective if you want to insure a sports car.

  1. Your Marital Status

Being married can get you cheap car insurance quotes as many insurers offer cheap rates to married drivers. They are considered to be more responsible in comparison with single drivers. So, be sure to mention it to your agent although they usually ask.

  1. Your Profession

There are a few professions that can qualify you for automobile insurance discounts. For example, you can get great rates if you are a member of US military. Doctors, teachers, emergency responders and engineers are only some of the professions that receive preferential deals. Check these jobs that qualify for cheap auto insurance. You can also qualify for discounts if you are a member of certain associations or your employer has a special deal with certain insurers.

These are the key factors that affect car insurance rates and it may take time to improve on them. If you are looking for an immediate effect on your premiums your best bet would be shopping around for the best quotes and comparing them to find the best value coverage. You can get several hundred dollars of savings by just following this tip. First you need to find an automobile insurance comparison website and check which companies are offering the best rates.

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