What factors affect your car insurance rates?

Okay, we understand that thinking about your car insurance rates is probably not very pleasant. In fact, it could be stressful. While insurance isn’t most people’s idea of “fun,” it’s important to understand the fundamentals. When it comes to your auto insurance, it’s helpful to understand what factors affect car insurance rates.

Yes, that big, scary number on your bill might seem completely random, but it’s anything but. Insurers don’t really do “random.” Everything is calculated. So, to give you some inside intel about how an insurance company sets car insurance rates, check out the following factors that can impact your car insurance premiums.

Factors that affect your car insurance rates.

1. Your driving record.

Having tickets, traffic violations, or a DUI on your record doesn’t help your case when it comes to your car insurance rates. If your driving history isn’t the best, you could face high insurance premiums because you’ve got a flashing light over your head that says “risk.” (Okay, not really, but your insurance company thinks so.) The thing is that tickets and accidents make the insurance company think you’re more likely to have a claim…and you’ll probably have higher rates.

2. The car you drive.

If your car is more likely to be damaged or stolen or if it doesn’t do well safety-wise, you could see higher rates. If your model vehicle is not often stolen and gets good safety ratings, you could see better rates. At any rate, you need to get a car insurance quote to truly figure out how much your insurance will cost.

3. Your age/gender.

Younger drivers have a higher risk of getting into an accident than more experienced drivers because young people don’t have a ton of practice behind the wheel…and they tend to take more risks. This is why teen auto insurance can be pricey.

Pro tip: If you’re a student and you’ve gotten good grades, check if your insurance company has a Good Student discount. It can really help you lower your rates.

Save money on your car insurance by getting multiple quotes.


4. Where you live.

If you live in an area with a ton of traffic and a lot of cars (like a big city), your risk of getting into an accident goes up, and your rates will probably reflect that. Urban areas also tend to come with higher rates of car theft and vandalism compared to smaller towns in more rural areas.

5. The purpose of your vehicle and how often you drive.

Those who commute a long way for work rack up more miles than those who cruise around town and don’t drive that far. The more miles you cover, the higher your chances of being in an accident.

6. The coverages and deductible you choose.

Your premium is also affected by the coverages you choose and the deductible you set. Remember that it’s crucial to get high enough limits of coverage to fully protect yourself financially in the event of an accident. Legal fees and expenses, including court-mandated judgments you have to pay to a driver you injure, add up very quickly, as do medical expenses for the injured driver. If you don’t have enough insurance, you’d be on the hook for any expenses that go beyond your limits of coverage. That’s why state minimum levels of insurance may not be enough.

Your driving history affects your car insurance rates.

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By setting a higher deductible, you could get lower premiums because you’re less likely to file a claim. (Your deductible is the amount you agree to pay if you have a claim.) Still, you don’t want to set your deductible so high that it would be a financial burden for you to pay if you do ever have a claim. However, if you evaluate your finances and find that you could comfortably afford to pay a higher deductible, you could see your rates go down.

7. Your credit score.

Some insurance companies use your credit score in determining how much of a risk you are. Those with stronger credit are seen as being less of a risk than those with poor credit. Taking care of your credit score and paying all your bills on time can help your car insurance rates.

8. Marital status.

If you’re married, you could get lower car insurance rates. That’s because married people get into fewer accidents – they tend to drive more safely and they tend to be less active. Married couples can also get discounts if they’re on the same insurance policy (many companies have multi-car discounts.) Plus, bundling home and auto insurance can help them save even more money.

9. How old the vehicle is.

The age of your vehicle affects your car insurance premium because it shows how likely the vehicle is to be considered a “total loss” in an accident. It’s often more expensive to get replacement parts and repair an older car than to simply replace it. On the flip side, newer cars are more likely to be repaired because it’s less expensive than replacing it.

10. Safety features.

Cars with anti-theft devices, traction control, good airbags, and other safety features that can prevent a loss are often attractive to insurers.

11. Discounts.

Lots of insurance companies offer discounts to help encourage safe driving. For example, being claims-free can often qualify you for a discount. Good students can often save on their insurance through a discount. Safe vehicles or those with anti-theft discounts may qualify for savings. And then you could get a multi-car discount or a bundling discount if you get home and auto insurance from the same company.

Your car insurance rates also depend on what car you drive.

Protect your car & save money. Get a quick auto insurance quote today.


12. Shopping around.

You can also save money on car insurance by shopping around for multiple quotes. That way you can compare coverage options and pricing.

And we’ve got good news.

Our team of insurance agents can take care of your insurance shopping for you. We’ll get you multiple quotes so you can get the best coverage at the best rate. Want to get started with your quotes? Just fill out our online quote form or give us a call today.