What Affects Car Insurance Rates?


Car insurance rates aren’t just random numbers that auto insurance companies. They are calculated¬† thoroughly based on a lot of your personal information and other outside factors. They even go beyond not just your driving history and habits, but also your age, and even your level of education and occupation. These information are gathered and used to determine how much you need to pay for your insurance.

what affects car insurance rates

Here are some major factors that affect your car insurance rates:

  1. Years of driving experience

One of the major factors that affect your insurance rate is your experience as a driver. It is obvious that inexperienced drivers in believed to pose more risk. It doesn’t matter if you’re 16 or 60 years old, not having any experience in driving is automatically pose a higher risk to companies. The more years of experience you have, the better for your insurance rate.

  1. Driving record

How you drive has a big impact in determining your insurance rate. Are you a safe driver or a reckless driver? Do you break a lot of road rules? Your behavior on the road is really important because it directly affects your risk to the company. For the insurer, a driver who has a lot of bad driving record are more likely to make claims compared to a driver who has a clean driving record.

Fortunately, these flaws become less and less important over time, as long as you make an effort to be more careful and responsible on the road to avoid future problems.

  1. Claims history

Driver factors aren’t the only ones the insurance companies take into consideration. If you’re not new to car insurances, you most likely have a history of claims behind you. All of these claims you’ve made with your present and previous insurer, can have an effect on your rates. The number of claims you made in a certain period of time can make insurance companies see you as too risky to insure, and if this happens, expect your rates to go higher.

  5.Vehicle Type

They type of car you drive can also have an effect in your rates. The insurance company will consider the car’s make and model, the purchase price, theft rate, the cost of its repair and accident rate. If the model of your car have been in a lot of accidents or has filed a lot of claims, your rates will most likely be higher. The age of your car is also a factor. Having a newer, flashier model has a higher theft rate and collision coverage rates would be much higher than an older model.

  1. Coverages and deductibles

An insurance policy is made up of different coverages. The type of coverage you choose can greatly affect your rates. The more types of coverage you have, the more risk the insurer is taking on by giving you more coverage.  Less coverage with lower premium however, will give you less protection. Minimum insurance requirement differ from one state to another. Check these requirements to see if buying additional protection would be worth your current financial situation.