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Key Factors Influencing Auto Insurance Rates
Car insurance rates start based on broad categories of drivers. Then, insurance companies look further at individual risk factors. To protect your investment, it’s crucial to understand how various factors can influence your car insurance cost.
Top Reasons Why Auto Rates Differ
Where You Live – The city and state in which you live can often play a role in your car insurance rates. For example, someone living in a rural town with less than 10,000 people will have a very different driving experience than someone living in New York City or Chicago. Rates can be determined by the likelihood of claims based on others in your area and can take into consideration crime, weather and more.
Your Age – Many insurance companies follow a motto of “the younger the driver, the higher the rates.” Statistically speaking, younger drivers have shown to be more easily distracted and have a higher chance of crashing, so they are considered risky to insure. The more years you have under your belt, the better your chance as a favorable rate.
Your Driving Record & Claims History – How safe of a driver you are is important to your insurance carrier as your behavior on the road affects your risk to insure. Drivers with a clean driver’s history typically qualify for better rates and can be eligible for good or safe driver discounts. Insurers don’t just consider your record, though, they also take into account your claims history.
Your Credit Score – You shouldn’t be denied car insurance because of a low credit score, but you could benefit from discounts and better rates if your score is in good or great standing. The better your score, the better your chances of being deemed a “good credit risk,” meaning you’ve demonstrated your ability to pay bills on time, repay borrowed money and are less likely to need to file a claim. All of this could make it less expensive to acquire the car insurance coverage you need.
Vehicle Type & Use – The way people drive Mustangs typically differs from the way someone drives a minivan. If data shows that drivers with your model vehicle have been in more accidents or filed more claims, there could be a chance your rates could be higher. They also take into consideration the purchase price, cost of repairs, safety tests and why you’re driving your car. A vehicle used to commute to school or work will be in traffic more often than a car that will only be used once a week.
Shopping for the Best Car Insurance Rates
Although an online price comparison tool can be helpful, a lower price tag upfront could end up costing you more in the long run. On average, we save our customers more than $400* a year on auto and home insurance, and in just minutes, we can help you find the right auto insurance from some of the nation’s most trusted carriers at a price that fits your budget.
Common Car Insurance Rate Questions
Q: How can I save money on car insurance?
A: With so many options for car insurance out there, looking for the best price can be a little overwhelming. Some of the easiest ways include shopping around and bundling but sifting through it all can be time consuming.
Q: How do I lower the cost of my premium?
A: Whether it’s maintaining a strong credit score or taking advantage of discounts, there are a number of ways to lower the cost of your premium.
Q: How should I go about insuring a new teen driver?
A: In addition to your teen driver obtaining a license on their highly anticipated 16th birthday, you’ll need to make sure your car insurance is updated to cover them.
Q: How can I get affordable car insurance?
A: The first and easiest way to find the best car insurance for you and your family is by shopping around. Car insurance is typically required when purchasing a new car, but at SelectQuote, we take the hassle out of the process and can compare coverage and rates from some of the most trusted carriers in just minutes. Learn more about finding affordable car insurance.