index | about us | privacy policy | contact us

Index | Auto Insurance | Factors Affecting Auto Insurance Rates

Enter your zip code and choose insurance type in the form below to get up to 5 competitive online quotes

Factors Affecting Auto Insurance Rates

Insurance rates (also known as Insurance premiums) appear to be a vexed question. It pays to give more consideration, time and effort to shopping for a better deal when planning to buy suitable Car Insurance policies. Premiums for the same coverage can vary considerably from carrier to carrier. Therefore, you are recommended to compare the prices, the coverage and exclusions among Insurance carriers and learn the factors that affect Auto Insurance rates, as well as what can be done to qualify for a lower quote.

The major determining factors influencing Auto Insurance Rates are the following:

1. Your age, sex, marital status, driving record and record of prior claims form reliable ratemaking criteria to define your risk level.

Insurance companies base their rates levels on years of statistical research, taking into account recent changes as well. According to statistical data, single males under 25 years of age belong to the highest risk group. The lowest risk group comprises married, middle-aged, non-smoking females.

Though the index of safe driving tends to vary and change with time, females are considered to be safer drivers than males, and young male drivers often end up paying about 40% higher premiums than female drivers. Then, families should expect their Auto Insurance premiums to increase when they add a new teenager driver to their policy.

As we all know, a bad reputation is hard to shake, and a good reputation is hard to maintain. It refers to driving record and driving habits to the full extent. You can't run away from facts: statistics shows that drivers with previous serious traffic violations are more likely to have recurring accidents than drivers with an accident-free record. Consequently, your bad driving record will take toll on the insurance premiums rates. For drivers with a clean driving record most Insurance companies will offer special safe driver discounts.

2. Your vehicle (its type and age) makes another important factor that has its affect on the Car Insurance rates.

Many insurance companies now use their statistical claims data on car makes and models in order to determine not only Collision coverage rates, but also Liability and Medical Payments coverage premiums. Cars with a high frequency of claims, such as sport utility cars and luxury and sports car models usually involve higher premiums. Larger cars are sometimes associated with lower rates since they tend to be safer in collisions. Then, lower-priced sedans normally cost less to repair and to replace, which leads to somewhat lower rates for their owners as well.

Restraint systems such as seat belts and airbags, now standard on all new car makes and models, tend to reduce the risk of injury, and are also regarded as one of the important factors in determining future premiums, for example Medical Payments coverage.

3. The way you use your car also affects Auto Insurance rates.

Incessant statistics shows that high annual mileage means greater chances of being involved in a car accident. Many insurance companies use 12,000 miles per year as the average mileage, and higher rates conduce to higher premiums. It refers to vehicles used for business and cars driven to and from work on a daily basis. These cars are more likely to get in crashes than those driven occasionally for pleasure, since they face heavier traffic conditions.

If you are a farmer and your vehicle is seldom driven in city heavy traffic, you will most probably get lower rates when purchasing Auto Insurance policy.

Some drivers who choose to take part in a special voluntary program experimenting with establishing premiums based on how much and under what conditions you drive, are known to get rate reductions of about 25%. The insurer can monitor the driving habits of the car owner by means of a tracking device mounted to the insured person's car. The device uses satellite and cellular phone technologies and shows the daily mileage as well as what time of day the car is driven most.

4. The area you live in also gives Insurance companies ground to judge about chances of exposure to accidents and base their Insurance rates accordingly.

Urban areas and densely populated areas invoke higher rates since they are notorious for high theft and accident claims. The number of passenger cars per square mile is also an important indicator of chances to file an insurance claim for collision, injury, car damage or theft.

Statistical data shows that over 80% of traffic accidents occurred within 25 miles of drivers' residence area. Road conditions, traffic patterns, traffic law enforcement, local costs of auto repairs, hospital and medical services, - all these factors are taken into account by Insurance companies when compiling claims record. Insurance companies can have many rating territories across the state and different rates for each city of a county.

The things you can provide for to get lower rates are the following:

1. Drive Safely.

This surely belongs to no-regret measures and recommendations for all times. No matter whether you pursue the aim of reducing your Insurance premium costs or not, safe driving is what you must practice to avoid traffic accidents and that is always the best you can do.

For Insurance Company, a clean driving record means lower risks and fewer claims. It is a common practice to reward safe drivers for their excellent driving habits. Consequently such drivers are offered lower insurance quotes.

Driving safely also means driving a "safe" car. Purchasing a vehicle that is officially recognized as safe and uses air bags, safety-harnesses, seatbelts, anti-lock brakes and running lights can make your premiums lower. Owners of cars with low theft loss and accident history can expect a discount.

You can't try too hard in making your car safer. Installing anti-theft devices in your vehicle and attending a Drivers Safety Training program can also be highly recommended for both you and your car's safety and lowering your Auto Insurance rates.

2. Drive Less.

It stands to reason that the fewer miles you drive, the less likely you are to be involved in an accident and consequently chances of your filing a claim are considered rather low. Some people choose to use alternative transportation for work reasoning from the fact that it can be faster and safer than to manage peak hour traffic. If you limit the number of miles you drive, you can expect a discount from some insurers.

3. Get the Best of a Bargain.

Insurance company can regard you as a reliable customer if the way you organize payment for your policy is financially wise and stable. For instance, you can increase your deductible, the dollar amount you pay before the insurance company starts paying your claim. This way you insure the risk of a large loss. Increasing deductibles on Comprehensive and Collision policies results in rates reduction.

Also, it is a good idea to purchase an annual policy instead of buying coverage for a shorter period. This step will give you a lower rate which remains unchanged for an entire year.

There are some other rather obvious ways to reduce rates and get discounts when buying an Auto Insurance. For example, you can get loyalty discounts if you purchase Home and Auto Insurance from the same company. Or you can take advantage of automatic payment deductions from your bank account or your credit card.

4. Prove your Trustworthiness.

Insurance companies would like you to make your payments on time; therefore your credit worthiness is an important issue they would worry about. In order to get a lower rate from your insurer, you should show yourself as a credit worthy candidate. Such things as maintaining a good credit score and clearing up any errors on your credit will be rather helpful.

5. Assess your Insurance Needs and Reduce Unnecessary Coverage.

Sticking to a minimum coverage will surely save you money. However, you should practice a wise approach to Auto Insurance coverage and never display carelessness when it comes to your or other people's safety.

Check your Health Insurance coverage. You may not need much Collision or Comprehensive coverage, if your medical expenses are covered by your Health Insurance and your car is not very pricey. If you don't drive your vehicle much, or your car is rather old and not very valuable, you can reduce your Insurance rates by purchasing only minimum liability.

There are some other things you can do to try and lower Auto Insurance rates.

You can study hard and get good grades at college. Bright students can often get a discount.
Give up smoking. Not only your health will benefit, but it can also help you get better quotes.
Let your insurer know in case your vehicle is driven only for a particular purpose, this will also help you save some money.

Be careful when trying your best to find the lowest price though. If the rates seem very low, check if you are really getting all the coverage you require. The insurance carrier you choose should be a well-known and trustworthy company, financially stable and able to pay its claims. You are also recommended to learn about claim process beforehand. It will not only educate you on where your money goes and what will happen in case of the insured event, but will also let you choose the company or agent whose claim process looks more straightaway and convenient to you.

Getting the most out of your Auto Insurance requires your awareness, so don't hesitate to use all information resources, including advice from your insured friends, call several insurance companies, compare rates, ask your insurance agent questions, and ensure all the risks are protected against at the best price possible.

Get your quote here. It's free, simple, fast and imposes no obligations upon you.