The Top 5 Factors That Determine What You Pay for Car Insurance

car insurance

Most factors that influence car insurance premiums are based on statistically-proven risks posed by certain groups of drivers. The higher the risks associated with a specific group of drivers, the higher the auto insurance rate. However, it’s important to know that some insurance companies are willing to offer you better insurance rates than others. That’s mainly because brokers consider different criteria when evaluating insurance applications. Below, we’ve compiled a list of the top five factors that contribute to auto insurance rates.

  1. Type of Vehicle: According to the Digital Journal – a global digital media network – vehicle make and model will greatly influence your auto insurance premium. Driving a trendy, pricey, new car will subject you to a higher insurance rate simply because repairing or replacing such a car costs much more than repairing or replacing an inexpensive vehicle. Besides vehicle repair and replacement costs, insurers will factor in the risk of your car being stolen, the likelihood of an accident and crash test ratings before approving your application.
  2. Driving Record: Driving record points also affect your car insurance rate. Depending on how many points have been assigned to your driving record for different traffic violations, including traffic tickets, insurance brokers may apply a surcharge for up to three years. If you’ve been ticketed for speeding, how much you were exceeding the speed limit matters a lot. One thing you can do to obtain a lower insurance quote is to attend defensive driving courses.
  3. Age: The National Highway Traffic Safety Administration’s Teen Driver Crashes: A Report to Congress documents that car crashes are the leading cause of death for 16- to 20-year-old teens. The same report specifies that the crashes caused by young drivers represent about six percent of the crashes caused by all licensed drivers. Based on this report and many other studies, young drivers are most susceptible to accidents. Thus, if you’re a young driver, you’ll most probably face high auto insurance premiums only because you belong to a group proven as “high risk.”
  4. Gender: Although teenage driver fatalities increase slowly over time, they actually continue to rise for young males and decrease for young females. Under this criterion, all male drivers from 16 to 25 years old are considered higher-risk drivers compared to female drivers of the same ages. Consequently, young male drivers are offered higher insurance rates than young female drivers. This isn’t discrimination, but a fact. However, car insurance premiums usually even out as drivers get older and maintain a clean driving record.
  5. Insurers: Auto insurance quotes vary from one company to another for many different reasons. For instance, while some insurers offer a discount as high as 25 percent for good grades and provide better rates to the drivers who take formal driver training courses, others seem to prefer drivers who complement their cars with additional safety features, such as adjustable seat belts, head restraints, and anti-theft devices. It’s up to you to find an insurance company that is willing to consider your strengths to the detriment of your weaknesses.

In addition to these factors, insurance brokers take into account experience, personal driving habits, driving distances, place of residence, occupation, uses of the vehicle, parking facilities, current insurance status, other insurance policies, and even marital status and abstention from drinking and smoking. Now that you know the top factors that affect your car insurance rate, you can make a more informed decision when purchasing auto insurance.