While your car insurance rates are determined by many factors, chances are you’re always looking for ways to save. Whether you’re shopping for a new policy or trying to lower your current rates, you may be tempted to reduce your coverage amount to try and save money. However, before you sacrifice coverage, it helps to get a better understanding of the different things that influence the price you pay for auto insurance. Here are five factors that can impact your auto insurance rates.
Five Factors That Can Impact Your Auto Insurance Rates
You may be surprised by the different elements that go into determining your car insurance premiums. From your location, to your occupation, to the type of vehicle you drive, here are some examples.
1. Personal Characteristics
Your age can play a big role in determining your rates. The younger you are, the more of a risk you are considered to insure. The more experience you have driving, the better chance you have to get a more favorable rate. If you are new to driving, there are opportunities to save money on your car insurance rates, including completing a defensive driving course, receiving student discounts, installing telematics apps like Progressive Snapshot and more.
Your credit score can also play a role in your rate as well. You can’t be denied car insurance because of a low credit score, but those with good credit scores may benefit from discounts and better rates.
2. Where You Live and What You Do
Where you live often plays a role in determining your rates. For example, living in a rural area is an entirely different driving experience than living in a busy city. Insurance companies can look at the likelihood of claims based on others in the area and also take crime, weather and more into account.
3. Vehicle Type and Use
If data shows that drivers with your model of car have been in more accidents or filed more claims, your rates will likely be higher. The purchase price, cost of repairs, safety tests and why you’re driving your car are also taken into consideration. For example, a car that is driven once a week will often cost less to insure than a car that is driven to school or work every day.
4. Drive Record and Claims History
Your record as a driver plays a big part in determining your risk to insure. Drivers with a clean driver’s history typically qualify for better rates and can also be eligible for good or safe driving discounts. Insurance companies will also take your claims history into account.
5. Car Insurance Choices
Car insurance rates vary widely from company to company, making the company you choose one of the biggest factors that can affect your rates. In order to find the best car insurance for you and your family, it’s important to shop around.
Tips for Lowering Your Car Insurance Rate
If you’re unhappy with your current auto insurance rates, the good news is there are several steps you can take to save money. Here are just some ways to improve your monthly premiums:
- Increase your deductible: In many cases, increasing your deductible can help you get lower monthly premiums.
- Shop around: It’s a good idea to periodically shop quotes from different carriers to make sure you’re getting the best rate available. You can even work with a broker like SelectQuote that does the shopping and comparison process on your behalf, which saves you the time and legwork.
- Be a safe driver: Maintaining a good driving record will help increase your eligibility for safe driver discounts.
- Bundle your home and auto insurance: Combining your home and auto insurance policies under one carrier, known as bundling, can help you save. In fact, SelectQuote customers save an average of $693 per year when they bundle home and auto insurance.
Let SelectQuote compare car insurance policies for you.
Whether you’re updating a current policy or searching for a new one, SelectQuote can help. Our experienced licensed insurance agents make the process quick and easy, searching trust auto insurance carriers in just minutes. We’ll take the time to learn about your unique priorities to help you find the right coverage and stay protected.