Factors That Affect Your Auto Insurance Costs

Posted on: 28 December 2020

Have you ever wondered how insurance companies calculate auto insurance rates? Many people wonder about this, and there is no simple answer. Instead, you must realize that insurance companies factor in many details when computing quotes. Here are some of the significant details that can impact your costs.

Your Age, Gender, and Marital Status

Some of the major factors that impact auto insurance costs are age, gender, and marital status. Married people tend to pay lower rates, as marriage is a factor that leads to safer driving habits, according to statistical information. For example, a married woman over the age of 25 may pay lower rates while an unmarried male driver under the age of 25 might pay higher rates. Men pay more than women because, generally, they cause more accidents. These factors are out of your control, yet they will affect your premiums.


The second thing that affects your rates is your location. Where do you live? Is your area in a rural or urban location? What statistical information does your location reveal? A person's location also affects a person's risk. You cannot control your area's risk levels in your area, so this factor is also out of your control. One thing to know is that people living in urban areas tend to pay more for auto insurance than people living in rural locations.

Your Driving Record

Next, you might want to know that your driving record also affects your costs. In fact, your driving record plays a bigger role than most other factors. People with spotless driving records have no tickets or claims in the past. People with poor driving records might have tickets or claims in recent times. If you have tickets or claims, it bumps you into a higher-risk category, which means that you will pay higher rates. You can control your auto insurance costs by avoiding these incidents.

Your Vehicle

Finally, your vehicle affects your costs. When applying for auto insurance, an agent will ask you for your car's VIN. The agent might also ask about the safety features of your car and its value. If you have a valuable car, you will pay more than if you had a cheap car. If your car has excellent safety ratings, you might receive discounts for these.

Auto insurance agents ask many questions before offering a quote, and they do this to find out the information needed to calculate the costs. If you want a quote, contact an agent today. 


Little-known Insurance Tips

While I have had auto insurance ever since I bought my first car at 16 years old and home insurance ever since I bought my first home several years ago, I have to admit that over the years I knew very little about insurance. I tended to just look at the price of the coverage and sign the paperwork without really looking into the pros and cons of each policy. After my friend was in a car accident recently (thankfully, she is okay!) and she said she had to pay for some of the damage to the other vehicle out-of-pocket even though she had a minimum state coverage auto insurance policy, I decided to put a lot of careful research into insurance policies and what they really offer. I want to help others by sharing the information I have learned on a blog. I hope I can help you!