Car insurance companies don't just throw out a number when offering you a quote. There are many factors including your age, the vehicle you drive, where you live and where you buy your policy that affect your final premium.
While some factors, such as your age, are beyond your control, there are others that you can work to get the best, cheapest auto insurance rate possible.
In this article
Demographic factors that affect car insurance
When calculating your auto insurance quote, demographic factors such as your age, gender and even whether or not you're married can affect how much you pay for a policy.
How old you are can have a big impact on how much you pay for auto insurance. Due to lack of experience behind the wheel, teens are considered the highest-risk demographic. As such, teens pay expensive car insurance rates. Your rates tend to even out once you're in the 25-to-65 age range. After that, you may see some increases in your car insurance premium over the years, but nothing on the level that teenage drivers pay.
Your gender affects your auto insurance quote as well. Car insurance companies have done research that suggests women are lower-risk drivers than men. As such, women may pay lower rates than men.
Your marital status
Car insurance providers have also found that married couples may be a lower risk than single or divorced drivers. If you and your spouse are looking for car insurance quotes, you might pay lower rates than your single friends. However, if your spouse has a history of accidents, you could pay more for car insurance.
Where you live
If you live in an area known for heavy traffic, high crime rates or a lot of car accidents, all of these factors can affect your rates. This is a difficult situation to change beyond the personal level. However, if you garage your car and practice safe driving, hopefully your neighbors will follow suit. This can drive the cost of auto insurance down for all.
Your credit score
Depending on which state you live in, your credit score can affect your car insurance rate. Some insurers associate bad credit scores with a higher risk for an accident, and increase your rate accordingly. However, California, Hawaii, Massachusetts and Michigan prohibit the use of credit scores when calculating car insurance premiums.
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How your car affects your auto insurance rates
The car you drive impacts your auto insurance rates in several ways.
Some makes and models of automobiles cost more to repair or replace than others, for example. This may drive up your premium.
The safety rating of the car you drive may affect your auto insurance quote, too. A high safety rating usually reduces your premium. By the same token, you may pay higher rates if your automobile has a lower safety rating.
The attractiveness of your car can mean higher rates as well. If you have a car make or model that is known to catch the eye of thieves, it can put your car into a high-risk category and increase your rates.
If you lease or finance your car, your rates are likely to be higher than if you own it outright. This is because if you own your car, you're only required to have your state's minimum liability coverage. If your car is leased or financed, your lessor or lender will likely require you to have comprehensive auto insurance in order to protect their investment.
Be aware that everything you hear about certain car features doesn't necessarily ring true. There is a constant myth that red cars cost more to insure. There is no proof to substantiate this claim. Auto insurers don't ask for the color of your car when calculating a quote, so it's unclear why this myth continues.
Does my driving history affect my car insurance rates?
Your driving record and insurance history can influence the price of your car insurance. If you have multiple tickets or accidents, your insurer will put you in a higher risk bracket. DUIs raise your car insurance rates even more.
If you drive a lot, that also increases the likelihood of an accident. If you spend a lot of time on the road, you may see higher rates. Keeping your mileage low can reduce your car insurance rates.
Regardless of the type of insurance you have, filing a claim almost always results in increased premiums. If you have filed too many auto insurance claims in the past, you might need to purchase high-risk auto insurance.
Insurance choices and your car insurance rates
Who you buy car insurance from and how much coverage you buy impacts your rates. Auto insurance providers offer various discounts that may affect your final quote, too.
The car insurance company you choose
Auto insurers use varying risk profiles to calculate the rate they give you, and they prioritize rate factors differently. One company may put a higher priority on your age than another, for example. This may result in different rates.
Coverage limit and deductible choices
The limits you choose for your car insurance policy affect your premium. Different states require different minimum amounts of liability coverage. While they fulfill legal obligations, these required limits are rarely satisfactory. To make sure you have sufficient coverage, we recommend boosting your liability coverage to:
- Bodily injury liability per person: $100,000
- Bodily injury liability per accident: $300,000
- Property damage liability: $100,000
These higher limits will raise your premium, but it's usually an affordable difference and can help your future peace of mind and bank account.
The higher your deductible, the lower your final rate. If you can afford it, set your deductible high. This reduces your premium and can save you a lot of money over time.
In order to stay competitive, providers offer various car insurance discounts to lower your rates. When you are looking for auto insurance, see if you qualify for any discounts.
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