Premium Factors

For some drivers, car insurance quotes are something of a mystery. There are many variables to what raises insurance quotes, and some of them are less obvious than others. Fortunately, for drivers that want to be in the know, there are standard industry factors that go into who will receive higher or lower quotes. Knowing is the first step toward less expensive insurance, then you can decide on what you can do to help lower your quotes.

Insurance companies often use a mathematical algorithm when deciding the rates a certain motorist should receive. An insurance agent will enter your information into a computer system, which then calculates your auto insurance quote. In order to better understand what goes into calculating your insurance quote, you should be aware of the following factors that many auto insurance companies take into account:

1. Age: It may seem like unfair discrimination, but age does play a factor in how high your insurance rates will be—although it is only one factor. The fact is that younger motorists are more likely to get into accidents and receive tickets while driving. As a result, they often have higher insurance premiums than older drivers.

2. Amount of Coverage: How much coverage you buy can directly affect how much you pay for in your premiums. Often, combining coverage plans like homeowner’s insurance and car insurance can result in lower overall costs when discounts are available from certain providers.

3. Credit History: Statistically, there is a correlation between bad credit history and the number of claims a person will have, and car insurance companies know this. Typically, the higher your credit score is, the lower you can expect your car insurance to be.

4. Driving Record: Moving violations and accidents will certainly affect your auto insurance quotes. If you have more than one violation or accident a year, this is especially true.

5. Driver Location: Where you live and do the bulk of your driving can affect how much you will have to pay on your insurance. Living in rural or urban areas with higher crime rates and more accidents can raise your monthly premium.

6. Marriage Status: Individuals who are married typically have fewer claims than those who are single.

7. Prior Coverage: If you’ve had continual coverage, and have shown yourself to be a loyal customer for other insurance companies throughout your driving career, you may be able to get lower rates with a new provider.

8. Use of Vehicle: How much and how far you drive your car will directly affect your auto insurance quotes. Certain models of cars also pose a greater risk. Auto insurance companies take all of these into account when coming up with a quote.

Although not a definitive list, the points listed above are definite factors that auto insurance companies use when deciding how much to charge you for your insurance. If you are curious about any other factors, don’t hesitate to ask your insurance provider, and always be aware of possible discounts you are qualified for. The more you know about what you can do to lower your monthly rates, the more likely you are to succeed.