10 factors that affect car insurance rates
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Behind-the-wheel behavior — such as getting a traffic ticket or being involved in a crash — is only one of the factors that affect car insurance rates.
A host of other factors can besides dictate how much you pay for car indemnity. For exercise, your credit history — and even where you live — could prevent you from getting a lower car policy rate .
Let ’ s take a look at 10 factors that can help determine whether your car insurance premium is low-cost or astronomic, and ways you may be able to lower your rate .
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1. Your age
Younger drivers with little to no on-the-road experience normally pay a steep price to get behind the wheel than their parents do. Why ? Teens are at a higher risk of crashing a cable car than drivers in any other age group .
For 16- to 19-year-olds, the fatal-crash rate per mile force is about three times the rate for drivers age 20 or older, according to the Insurance Institute for Highway Safety ’ randomness analysis of 2018 data from the U.S. Department of Transportation .
broadly, a car insurance company will charge a higher rate if any driver below age 25 is covered under a policy .
similarly, rates go up for drivers after senesce 65 because of increased car indemnity claim rates and risk. The Insurance Institute for Highway Safety ’ second analysis found that older drivers, specially those age 75 and older, have higher barge in death rates than drivers age 30 to 74 .
2. Your driving history: Experience, claims and violations
In short, the cleaner your drive record, the better your insurance rate will be .
If you ’ ve had accidents or serious violations — such as a DUI or DWI conviction, besides many tickets in a short fourth dimension frame or driving without indemnity — insurers will consider you a bad driver and agitate you a higher agio. Likewise, if you ’ ve filed respective indemnity claims or had claims filed against you, your rate will typically be higher .
Newer drivers besides typically pay higher rates than those with a longer history of safe drive .
3. Your mileage
Do you have a drawn-out change to and from work each day ? If so, you might pay more for car indemnity than person who merely depends on a vehicle to run quick errands. That ’ south because more miles logged translates into more roadway risks, such as a car crash .
4. Your vehicle: Make, model and safety features
Your car ’ mho make, exemplary and base hit features can all affect your policy rate because of several factors .
Cost of the car and repairs
The rate for insuring a luxury car like a Mercedes-Benz will normally be higher than the rate for a more low-cost car like a Honda. Why ? A higher-priced car typically costs more to repair or replace than a cheaper model does, says John Espenschied, owner of Insurance Brokers Group .
Potential for injury or damage
Another rate-setting variable is a cable car make and model ’ s overall safety record, says Loretta Worters, a spokeswoman for the Insurance Information Institute, an industry-backed nonprofit organization that helps consumers understand indemnity issues .
“ Insurers not merely look at how safe a particular vehicle is to drive and how well it protects occupants, but besides how much potential wrong it can inflict on another cable car, ” she says .
If the model you drive is more likely to cause price in an accident, your liability policy premium may be higher. You can check a car ’ s safety rat on the Insurance Institute for Highway Safety ’ s web site .
The good news is that if you have a car with safety features, such as antilock brakes, an anti-theft system or blind-spot indicators, you may be able to qualify for an policy dismiss .
Likelihood of theft
Auto indemnity companies may charge you more if your vehicle ’ s make is among those that are stolen the most. The National Insurance Crime Bureau reports on the top 10 most steal fomite makes each class. In 2019, life-size Ford pickup, the Honda Civic and life-size Chevrolet pickups were the top three types of vehicles targeted by thieves .
5. Your location
In setting cable car indemnity rates, indemnity companies drill down to the ZIP code where your car will be parked the majority of the time .
Because of by and large higher rates of accidents, larceny and vandalism, car owners who live in urban areas might pay higher car policy premiums than their small-town or rural counterparts do, Worters says .
hera are some other placement factors that may affect your car insurance rates .
- How much auto insurance fraud occurs in your area
- Which kinds of severe weather, such as hailstorms and ice storms, hit your region (and how often)
- How much car repairs cost in your area
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6. Your credit
How you handle credit rating affects your ability to get a credit card or a mortgage, but it can besides influence how much you spend on car indemnity .
Depending on department of state law, cable car insurers can use what ’ s known as a credit-based insurance grade when calculating the price of your coverage .
Historical data suggests that your credit history can help predict the likelihood that you ’ ll file an policy claim — Federal Trade Commission studies have revealed that those with less-than-perfect credit are more probably to file car policy claims than those with good credit .
A not-so-great credit history can trigger a rise in your indemnity rates because companies view you as a bigger fiscal risk. Drivers with hapless credit pay $ 1,546 more on modal for car insurance than those with excellent credit, according to The Zebra ’ mho 2020 The State of Auto Insurance report .
State laws in California, Hawaii, Michigan and Massachusetts prohibit this credit-based indemnity scoring from being factored into car insurance rates .
Keep in mind that a credit-based policy score international relations and security network ’ t the same as the credit scores that come into toy when you apply for a car lend or credit wag. even recognition scores examine an array of factors to determine how likely you are to repay a loan or a line of credit .
meanwhile, a credit-based indemnity score looks at some, but not all, factors in your credit history to determine how likely you are to file an indemnity claim. Among other things, insurers take into consideration your citation use, accredit history, delinquencies and recognition desegregate to come up with your credit-based indemnity score .
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7. Your gender
While men under 20 broadly pay more for car insurance than women of the same historic period rate, the Consumer Federation of America found in 2017 that women between the ages of 40 and 60 much pay higher rates — anywhere from 1 % to 16 % more than men, depending on the policy company .
In some states, including California, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania, it ’ s against the law for rates to be based on gender .
8. Your marital status
Whether you ’ re single or married can besides affect your indemnity bounty. indemnity companies have found that marry drivers are less probable to file car indemnity claims than non-married drivers. As a resultant role, married drivers may pay less for indemnity coverage than single drivers .
But like to indemnity score and gender, some states — including Hawaii, Montana and Massachusetts — have outlawed marital status as a factor in determining person ’ s insurance rate .
9. Your auto insurance coverage: Types, coverage limits and lapses
several factors related to your car policy coverage can affect your rates .
Types of car insurance you buy
The more coverage you purchase, the higher your insurance costs will be. The types of coverage you need deviate based on your state ’ mho requirements and whether you own your vehicle outright or finance or lease it .
Liability policy is compulsory in every state except New Hampshire. But New Hampshire does mandate that drivers prove they can provide a sufficient total of money in case of an at-fault barge in. The cable car policy mandate has a little eddy in Virginia : Drivers are required to buy coverage or pay an uninsured centrifugal vehicle fee to the state ’ s department of motor vehicles .
Some states may besides require personal injury protection, or PIP, uninsured/underinsured motorist coverage or aesculapian payments coverage .
additionally, if you have a car lend or lease your vehicle, the lender may require you to buy comprehensive and collision coverage .
Coverage limits and deductibles
A coverage limit is the utmost amount your indemnity ship’s company will reimburse you on a traverse claim. The higher your coverage limit, the higher your agio will be .
Your deductible is the sum you ’ ll pay out of pouch on a cover claim before your insurance kicks in. A higher deductible will lower your premium, but you ’ ll need to come up with more cash if your cable car is damaged or stolen. alternatively, a lower deductible means you ’ ll give less money upfront, but your premium will be higher .
Coverage lapses
If you ’ ve let your car insurance lapse in the past, you could be considered a bad driver, and your rate could be higher than person who ’ second maintained coherent coverage .
10. Your auto insurance company: Rates and discounts
The car policy company you choose is a key agent in how much you pay for insurance. Rates vary by insurance company, and some insurers offer a broader range of discounts than others .
Depending on the caller, you may be able to find loyalty, multi-policy, multi-car paperless, estimable driver, good scholar, guard feature, military, homeowner and pay-in-full discounts, among others .
That ’ second why it ’ s so important to shop around and compare indemnity quotes from multiple insurers to help make sure you ’ re getting the best policy for your needs and budget .
Next steps
Shopping about for car policy is all-important — whether you ’ re shopping for car insurance for the first time or looking for a new policy because you bought a raw car, moved, changed your driving habits or experienced another change in circumstances. Be indisputable to ask indemnity companies about any pace discounts they might offer. And if you ’ re a careful driver or don ’ triiodothyronine drive much, ask whether the insurance company offers any usage-based indemnity programs. Depending on the policy, this type of indemnity bases your premium largely on either how safely you drive or your mileage, which could save you money .
even if you already have an car policy policy you ’ re glad with, shopping around each year can help you assess whether you still have the best rate for yourself or can find a better rate elsewhere.
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About the author: Rebecca Giantonio Moran is a senior editor at Credit Karma with a focus on auto. She has nearly 20 years of experience in brand development, content and website strategy, copywriting, marketing and public relations. T… Rebecca Giantonio Moran is a senior editor at Credit Karma with a stress on car. She has closely 20 years of experience in brand development, content and web site strategy, copywriting, marketing and public relations. T… Read more.