10 Key Factors That Affect Car Insurance Rates

October 22, 2022

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The biggest factors that affect auto insurance rates are state coverage requirements, age, and the make and model of the car. The more coverage you are required to purchase in your state and the more valuable your vehicle is, the more you will pay for auto insurance. Teen drivers also tend to pay more in premiums than older, more experienced drivers.

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10 factors that affect car insurance rates

state requirements
age
make and model of car
high risk violations
annual mileage
credit history
handling log
zipcode
marital status
gender

Some of the factors that affect car insurance rates are within your control, like your credit history and whether you’ve ever been convicted of drunk driving. other factors are, at least largely, out of your control, such as the population density of your city and your age.

Reading: What factors affect your car insurance rates

factors that most affect car insurance rates

1. state requirements

Your state of residence is one of the biggest factors affecting auto insurance rates, with premiums for state minimum coverage varying by as much as 318%. Each state has its own auto insurance laws, with different minimums and different categories of required coverage. the more coverage you have to buy, the more expensive your policy is likely to be.

2. age

Auto insurance rates can vary by up to 367% based on age. Young drivers pay more for car insurance as they are considered to be less experienced and more likely to be in an accident. After age 25, driver’s insurance rates begin to decline.

On the other end of the spectrum, older drivers are often charged more after they turn 65. Older drivers are not only more likely to be in a car accident than younger adults, they are also more likely to be injured in a collision.

3. make and model of car

Some vehicles are cheaper to insure than others. For example, a truck is 3% cheaper to insure than a sedan, on average.

Auto insurance companies prefer to insure safe vehicles because they are less likely to generate costly claims. so a car with high safety ratings may get you a small discount. On the other hand, some vehicles are statistically more likely to be stolen, including the Honda Accord and any large Ford pickup. as a result, they tend to be more expensive to insure.

4. high-risk offenses

Moving violations and auto accidents are factors that can increase the cost of car insurance coverage by 20% to 200% compared to what you were originally paying. How much your costs increase depends on a couple of things: the seriousness of your offense and whether you’ve been convicted in the past. Multiple violations make you a high-risk client for your insurance company. Some companies use traffic violations as a factor in the price of car insurance for only three years, while others keep them on their record for longer. it’s worth looking again three years after your last incident, in case you can get a better deal elsewhere.

5. annual mileage

Your annual mileage is one factor that can influence your auto insurance rates because the longer you’re on the road, the more likely you are to have an accident. As a result, car insurance companies charge you more if you have a long commute. if you’re just driving for fun, you’ll likely pay less.

6. credit history

Your credit history is an important factor insurers use when calculating premiums in most states, considering drivers with poor credit scores pay an average of 71% more than drivers with good credit. But if you live in California, Massachusetts, or Hawaii, you’re in luck. they do not allow auto insurance companies to take your credit score into account. on the other hand, if you have good credit, you can save a little money on car insurance in the other 47 states.

7. driving history

Your driving record is a factor in your insurance costs, for better or worse. if you have a clean record, you could end up paying 40% less than drivers with a poor record, thanks in part to the availability of safe driver discounts.

but you’ll likely be charged more if you make a lot of insurance claims, whether the accidents are your fault or not. even his first accident could increase his rates for the next 3 to 5 years.

The number of years you have been traveling is also important. For example, new drivers over the age of 25 tend to pay more than their peers who have been behind the wheel for years.

8. postal code

The area you live in is an important factor for insurers to consider because it affects the likelihood of your vehicle being damaged. For example, your zip code can cause your insurance rates to fluctuate by as much as 91% in California.

Depending on where you work and park your car overnight, you may get a small discount (or surcharge) for your mailing address. Big cities tend to have higher crime rates, as well as crowded highways where accidents are common. rural roads are less congested and rural areas have less property crime.

9. marital status

Your marital status is an important factor when it comes to your auto insurance premiums because married drivers are statistically the least risky drivers to insure, with up to 50% fewer accidents compared to everyone else drivers. Let your auto insurance company know if you get married, so your wallet can benefit from the positive stats.

10. gender

Gender is a factor that can influence auto insurance rates in some states. men in their mid-40s pay an average of 6% less for car insurance than their female counterparts, for example. on the other hand, teenage male drivers tend to pay more for auto insurance overall. although, the gender gap is evened out for drivers in their 30s.

how weather affects car insurance rates

Auto insurance rates tend to rise over time, due to factors such as population growth, rising health care costs, and technological advances that make vehicles more expensive to repair. for example, the cost of the average car insurance policy increased by approximately 59% between 2009 and 2019.

source: insurance information institute

tips to lower your car insurance

look for a new policy
reduce your coverage
raise your deductible
check discounts
reduce your mileage

Here are some of the fastest and most efficient ways to lower your rate if you’re having trouble paying for your coverage. As a long-term solution, you can try to fix other factors like the type of car you drive, your credit score, or your driving record. For more information, check out WalletHub’s guide on how to lower your car insurance premium.