As a driver, car insurance is one of the most important things to have with you at all times.
It can be the difference between financial peace and becoming extremely in debt due to an unforeseen car collision. Not to mention the fact that you’re required to have it by law.
Everyone knows that there are several factors that determine the rates you’ll receive for car insurance. However, not many people know what those factors actually look like.
It might surprise you to hear the number of factors that affect car insurance rates that you’re eligible for. Here’s an in-depth look as to what those are.
1. Your Information
That might seem a bit vague, but it’s one of the most key factors in determining whether car insurance companies view you as a risk or a safe driver.
Statistics show that things such as your age, your education level, marital status, and your gender can all be indicators of your likelihood of a car accident.
For example, insurance rates are far higher for those drivers on the road that is under the age of 25. Meanwhile, being married can help lower the rates that you receive, even if you’re divorced or your spouse has passed away.
To get a better idea of what that looks like, be sure to reach out to a trusted auto insurance provider for more details.
2. Your Residence
There are some factors that are completely out of your control. Certain specifics about the community you live in can drive your rates up or down.
Such is the reason that where you live is highly considered in the rates that insurance companies will offer you.
Places that have a higher population are viewed as a bigger risk for things such as car collisions, car theft, car injuries, and other auto-related accidents.
Not to mention that the higher the population, the more drivers there are without car insurance on the road.
That means there’s a higher chance that, since those drivers don’t have insurance, you’ll be depending on your insurance to cover repairs. Fair or not, where you live is a huge reason for your car insurance quotes.
3. Your Occupation
Not many people realize that their occupation is taken into consideration by the insurance companies. But when you think about it, it makes complete sense.
For example, a salesman/saleswoman doesn’t just use their car for their daily commute to and from work. They also use it for visiting clients, business meetings, drop by’s, networking events, etc.
Because of the fact they use their car much more each day than an occupation such as a factory worker, there’s a higher chance for an auto accident.
Put simply: the more your profession requires you to be on the road with your car, the higher your car insurance rates will be. Remember, these higher rates are there to protect you, not hurt you.
4. The Car You Drive
They say that the type of car you drive is a general reflection on your personality. If that’s the case, then it’s also a general reflection on your car insurance rates.
There are several reasons why the type of car you drive plays heavily into your car insurance amount.
For one, car types such as sports cars come with a higher likelihood of things such as large claims that come directly from a driver that was speeding.
Secondly, they also consider how much it would cost (on average) to repair in a car accident and how much damage it would do to another car in a collision. For example, a truck running into a sedan.
All of these things are considered into the rates an insurance company is willing to grant you for the type of car that you drive.
5. Whether Your Car is Owned or Leased
Here’s one thing that the car salesman won’t tell you about leasing out a car rather than purchasing one: your car insurance rates will be affected.
The leasing company will push you to buy more auto coverage than most people would choose to with cars that they own. Rightly so. The leasing company is trying to protect their property from a collision that you get into while leasing it.
Not only will the company you’re leasing from push you to get more coverage, but they will also require you to. This means paying for things such as gap insurance, collision coverage, and comprehensive coverage.
6. Your Credit Score
It’s probably a surprise to no one that your credit score is going to play a factor in the rate you receive for auto insurance.
After all, it affects every other rate and quote that you receive in your adult life.
There’s not a definitive tier of what credit score will start to lower or raise your auto insurance rates. But, as one might expect, the lower your credit score, the higher a premium that you’ll be paying your auto insurance provider.
Consider All These Factors That Affect Car Insurance Rates
Now that you have a better idea of the factors that affect car insurance rates, it’s time to find the best provider for your needs.
Take your time and receive quotes from several different insurance companies before deciding which one you’ll invest in.
Be sure to read this article on how to cut costs for auto insurance if your current rates are too high.
For more inquiries, please start the process by requesting an auto insurance quote and we’ll be delighted to work with you further.
