What Determines My Auto Insurance Rates?
As a savvy consumer who’s always looking to save money whenever possible, you may be wondering what auto insurance rate factors play a role in how much you’ll pay for your policy. While not all insurers will pull your credit history when they determine your premium, there are certain other factors that most insurers can and do consider.
Coverage Levels
Of all the auto insurance rate factors that play into what you pay, the type of coverage you select and the deductible you choose are the only ones you really have control over. Generally, choosing lower coverage limits and a higher deductible will yield the lowest-possible premium. Of course, choosing this strategy could leave you underinsured in the event of an accident and forced to pay repair costs out of your own pocket.
It’s also important to remember that opting for comprehensive coverage and add-ons like uninsured motorist, rental car reimbursement and towing can all increase your total premium due.
Driving History
As you already know, the number of tickets you’ve received and accidents you’ve been in can have a major impact on what you pay each month. What you may not realize is that filing claims with your auto insurer for things like windshield chips or cracks outside of an accident can also make a difference. Many insurers will review your claims history and bump up your rates if they believe you’re more likely to file a claim with them in the future.
Mileage Expectations
The number of miles you expect to put on your vehicle each year is another of the auto insurance rate factors that many people don’t expect. The logic behind this is that, the more time you spend on the road, the more likely you are to get into an accident or get a ticket. While this can mean a rate increase for people with long commutes, you may receive a nice discount to your premium if you work close to home or drive infrequently.
Vehicle Type
Basically, everything about your vehicle except for its color will factor into how much you pay for car insurance. If your car has anti-theft features or high safety ratings, it can help you pay lower premiums. On the other hand, a vehicle with poor safety ratings that’s known to cost a fortune for repairs will usually bump up the premium. In some cases, vehicles that are considered hot targets for car thieves could also receive a rate increase.
Where You Drive
In addition to how much you drive your vehicle, where you drive and park it could factor into your rate. Typically, motorists who drive to urban areas and park their vehicles there are considered at higher risk of car theft than people driving in less-populated areas. If, however, you’re able to park your vehicle in a secured garage instead of on the street, your insurance company may take this into account.
Your Age and Gender
As unfair as it may seem, your age and gender are two major auto insurance rate factors. Drivers typically receive higher rates until they turn 25, because it’s widely believed that age brings experience behind the wheel. In many cases, male drivers – especially unmarried male drivers – will pay more than their female peers.