Factors That Determine Your Auto Insurance Rate
Summary
When it comes to setting an auto insurance rate, several factors come into play. These include your age, gender, driving record and more. Some factors in life are within your control, while others are out of your hands. But if […]
When it comes to setting an auto insurance rate, several factors come into play. These include your age, gender, driving record and more.
Some factors in life are within your control, while others are out of your hands. But if you know how to shop around and compare policies, you’re sure to find one that meets both your budget and coverage needs.
Location
Your location plays a significant role in determining your auto insurance rate. Not only does it matter where you live, but also how much traffic there is in your area, crime rates in your neighborhood and road quality in your immediate area. All these things come into play when setting an affordable policy for yourself or someone you care about.
Insurers use data to assess the risks associated with insuring drivers in your ZIP code. This may include things such as number of claims filed, weather-related damage and vandalism.
Gender
When it comes to calculating an auto insurance rate, insurers usually take into account your age and gender (but never race or religion), as well as other factors like your driving record, vehicle type and location.
In certain states, however, insurers cannot use your gender to set your rates — or at least must only do so in conjunction with other criteria.
California is especially affected by this issue, where insurers may charge women differently than men even when both drivers have similar profiles and driving histories. State regulators have proposed a new regulation that could help address the problem.
Age
Your age can have a major influence on your car insurance rate. In fact, it’s one of the primary factors used by auto insurers when calculating premiums.
Younger drivers typically pay more for insurance because they’re considered high-risk by insurers.
As drivers mature and gain experience behind the wheel, their insurance costs typically decrease as they report fewer accidents.
However, this downward trend comes to an end as you enter your 70s. At that time, aging-related factors like vision or hearing loss and slowed response time could increase your vulnerability for accident claims, thus raising insurance rates.
Driving Record
Your driving record plays a significant role in determining your auto insurance rate. The more violations on your record, the higher your rates will be.
Your rate may go up after a major infraction, such as a DUI. Your insurer will likely view you as more of a risk than those with fewer tickets and accidents.
Your driving record can be accessed online, by mail or in person at your local DMV office. Typically, these copies cost $10 or less depending on the state.
Vehicle Type
Auto insurance rates are determined by several factors, including the make and model of the car as well as its safety features and crash test scores.
Vehicles include cars, trucks, vans, SUVs, motorcycles and buses. They may also include railed vehicles, watercraft, amphibious vehicles or aircraft.
Defined vehicle categories are essential for the competitiveness of the automotive industry. As part of the EU’s type-approval systemEN***, manufacturers can take advantage of the Single Market while guaranteeing their products meet European technical requirements. Total technical harmonisation has already been achieved in three vehicle types (passenger cars, motorcycles and tractors), with plans to extend it further into other vehicle classes in due course.
Insurance Company
Auto insurance rates are determined by many variables, but the insurer is always at the center of conversation among all insureds. Smart consumers will shop around to find the most competitive price for their coverage and service needs. There is a vast array of companies operating in this space – from mutually owned entities to proprietary businesses – so speaking with an experienced agent about your individual requirements is your best bet. It is essential that you comprehend both their business model and risk appetite so that you can purchase a policy with peace of mind knowing they have taken into account.