Understanding The Common Factors that Affect your Auto Insurance Rates

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Published on July 5th, 2015 | by Joan Makai


Car insurances are expensive but mandatory expenses in the personal budget. However, the premiums of car insurances vary based on many factors, and therefore it is possible to bring down those premiums with such factors. Following is a list of factors that can increase or decrease the car insurance premiums.

  1. Driving Record

This is no brainer. The bad driving record implies higher premiums.

  1. Locality

If there are more vehicles in a location, then the probability of accident increases. Consequently, premiums increase as well. If there are more thefts in any locality, then also car insurance companies increase the premium because there is increased the risk of car theft, and any car insurance product includes coverage for such thefts as well.

  1. Age, Gender, and Marital Status

Youngsters are considered as rash. Girls are deemed to be more cautious when compared to boys, and married people are deemed to be more careful when compared to the unmarried client simply because there are responsibilities in the picture. Therefore, car insurance premiums on vehicles of youngsters and unmarried persons are higher.

  1. Personal Habits

Some personal habits such as smoking and regular drinking increase the risk of fire or accident. Consequently, these practices can increase the premium of any car insurance.

  1. Profession

Car owners who are doctors, paramedics, police officers, and insurance agents are considered to be safer bets when compared to other professionals. Consequently, such persons can bargain and bring down the premium on their car insurance.

  1. Credit Scores and Grades

Though credit scores and grades in school, do not have a direct impact on car driving or car insurance, these scores and grades are a good indication of the person’s responsible behavior. Effectively, the person can avail some discount on premiums if he or she has a good credit score or has good grades.

  1. Vehicle Type, Age, Size, and Record

Replacement costs of older vehicles are lower than the replacement cost of new cars. Effectively, the premium on insuring older vehicles is lower. However, if the older vehicle met with a few accidents before, or the model or brand of the car is known for certain types of problems which lead to accidents, then the premium would be higher. Auto insurance businesses consider larger vehicles to be safer. Consequently, car insurance coverage for larger vehicles is likely to be lower.

  1. Usage

Some people use their vehicles extensively, whereas others use their cars sparingly. Some professions require people to commute long distances every day. Such usage increases the probability of the car meeting with any accident. Consequently, the premium on vehicles that are used frequently, or used in dangerous terrain are higher.

  1. Additional Security Features in the Car

There are several modern methods to secure cars nowadays. Each such process entitles the car owners to negotiate lower premiums.

  1. Auto Insurance Business

Some of these businesses are new, and others are old. Newer ones may try to keep the premiums lower so that they can capture some of the market shares.

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Joan Makai



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