When you are looking for auto insurance, it can seem like the cost of premium quotes varies randomly. If you don't know what affects premium rates, it can be difficult to find the cheapest auto insurance. On the other hand, if you do know how insurance rates are chosen and what factors are taken into account, you have a much better chance of finding the best deal. Here are several factors that affect auto insurance rates.
In some ways, you don't have a lot of control over the demographic into which you fall. Demographic categories include location, gender, and age, along with some other considerations. For example, gender and age combined are a large factor in premium rates. In general, young men have higher rates of accidents than young women, so their premium costs are higher. On the other hand, as age increases, the statistics reverse. Older women tend to have a higher chance of being in minor accidents than older men, so generally, older men are eligible for the cheapest auto insurance.
Location and marital status also affect insurance rate. Getting married, especially for men, can greatly decrease insurance premium costs. Location is a complicated factor. The majority of accidents happen close to home, so rates can be higher in neighborhoods with lots of people and cars. The cost of car repair and rate of theft are also taken into account, as well as the percentage of uninsured drivers.
Credit Score and Profession
There are some demographic factors over which you have some control. A credit score is a big one. The cheapest auto insurance is available to people with higher credit scores. Another factor that some insurers consider is profession. People whose job requires a lot of time on the road may have higher premium rates due to the higher risk of accidents. Other professionals are considered to train people to be safe and cautious drivers. Police officers, paramedics, and insurance underwriters, for example, usually qualify for low rates.
How Your Car Affects Your Rates
There are many car-related factors that can affect your insurance rate. The car you drive is judged based on safety features, risk of theft, and repair costs, to name a few. The safety rating of your car can be a big factor in finding the cheapest auto insurance. For cars with a high safety rating, there is less chance the insurance company will have to pay for accident victims' medical bills, so the premium rate is generally lower. Some factors that can lead to a higher safety rating are airbags, traction control, and anti-lock brakes. The size of your car also matters. Because larger cars are generally safer than smaller cars in the event of an accident, they generally incur lower insurance rates. The exception to this is a car with a large engine relative to body size, like a V8 sports car.
Your car's age also affects the insurance rate. While repair costs for older and newer vehicles may not be very different, there is a greater chance that an older car will be "totaled" in an accident. Newer cars, on the other hand, are less likely to be totaled, and so the rates for collision coverage on newer cars are often higher. If your car is quite old, it may be wise to forego collision coverage altogether to get the cheapest auto insurance rate. If your car is one of the models that are likely to be stolen, your rates will probably be higher.
It makes sense that your personal driving history has a large impact on your insurance premium rates. If you have a history that involves accidents, tickets, or several previous insurance claims, chances are your rates will be higher than those of someone with a clean driving history. If your driving history is full of problematic issues, an insurance company may refuse coverage altogether. On the bright side, if you clean up your record by driving more diligently and avoiding accidents and claims, the problems on your record become less important over time. The exception to this rule is a DUI charge, which can affect your rates or lead to denial of coverage up to 10 years later.
Your typical driving activity also affects your rate. If you don't drive very often or very far, there is less chance for an accident and you may qualify for the cheapest auto insurance. On the other hand, if you have a long commute to work every day, it will most likely increase your premium amount. Parking your car in a garage every night may also lead to a lower premium.
If you own a car, you are required to purchase insurance for it. Because there are so many things that can affect the amount of the premium, it’s good to be informed and do what you can to become eligible for the cheapest auto insurance. One thing you may want to research is if your provider offers discounts for multiple policies. Many insurers offer savings if you have more than one policy with their company, for example, auto insurance and homeowners insurance. Some providers offer discounts to people associated with an alumni or fraternity organization. There are also insurance providers that offer discounts to military members or veterans, and some providers that only insure people with a military connection.
It can require some work to find the cheapest auto insurance. While there are some factors you can control to help your rates, others are not things you can change. One good thing to do is shop around for insurance every few years. Many providers offer a comparison service so you can see the rates offered by various companies. Additionally, some people believe that merely changing providers every few years actually results in a lower cost overall. However, this method does require more research and paperwork than remaining with a single insurance company, so whether it is a good strategy for you depends on your priorities.