7 Factors that Influence Auto Insurance Price
Reader’s Question:
What determines the rates that auto insurance companies charge me?
James
Phoenix, AZ
Good question. There are certainly no shortages of factors insurers will continue to use in order to determine your rates. Listed below are some of the contributing factors that dictate your overall auto insurance price:
1. Vehicle Type – Make, market price, model, year, manufacturer and safety rating all contribute to how safe (or not) your automobile is. The type of vehicle you drive has a huge influence on your rates. Vehicular theft/ vandalism and overall cost of repairing or replacing your vehicle are taken into consideration.
2. Driving History – An even bigger factor that contributes to your premiums. Driving history is the best indicator of how safe/responsible you are as a driver. The better you are at staying safe while on the road, the lower your rates become.
3. Personal Profile – This includes your age, marital status, gender, and even the nature of your job.
4. Accident Claims – The more you file claims the more logical it is for your insurer to deduce that you’re getting yourself into more accidents. Hence, higher rates.
5. Where you drive – The location where you drive and where you park/garage your car is also taken into consideration. Living in a big city with denser traffic and higher crime/theft rates will add to bigger rates.
6. Credit Score – People with low credit score have been shown to file more claims. However, this only applies to states where insurers and other companies are allowed to reference on credit history.
7. Discounts – This has a positive impact on your auto insurance price. Discounts are eligibility-based but there are quite a number of options available. Always ask your auto insurer about the discount options they offer and how you can qualify for them.