10 Factors That Can Affect Your Car Insurance Rate

Car insurance rates don’t appear out of thin air. Insurance rates are calculated from a combination of factors that can vary from state to state. By combining elements from your personal information, driving history, and more, insurance companies develop algorithms that calculate how much your case will cost the insurer. As a general rule, the higher the risk –  the higher the rate.

Some factors, like accident history and age, are apparent. However, it tends to surprise some consumers that other factors, including marital status and credit history, can also affect your car insurance rates.

10 factors that may raise or lower your car insurance rate:

1. Location

Did you know insurance companies can find statistics such as vandalism, auto claims, stolen cars, weather damage, and more by just looking at your zip code? Generally speaking, areas with a dense population will have more drivers which could equal more accidents. Cities with high crime rates will increase the chances of your car being broken into or stolen.

However, this does not always mean living in a rural area will equal lower rates. Do you live near a road where deer cross frequently? You technically have a higher risk of being hit by a deer instead of another car. Do you frequently drive on an interstate that has a history of traffic accidents? That factors into your car insurance as well.

2. Age

The age of the driver is a well-known factor for insurance premiums. Statistics have proven that young, inexperienced drivers and the elderly are the riskiest drivers, whereas those between the ages of 30-65 are the safest.

First-time drivers have a tendency to be distracted while driving and display dangerous habits such as drinking and driving, not wearing a seatbelt, or texting while driving. On the other hand, the elderly naturally show slower reflexes and may have weaker senses that affect their driving capabilities.

3. Marital Status

Settling down applies to more than just finding a partner and starting a family. Married drivers are statistically less active and are considered safer drivers than their single counterparts. Driving with precious cargo such as a spouse, child, or pets will cause people to be more considerate on the road. Being married can lower your car insurance rate anywhere from 5% to 15% percent.

4. Credit History

There is a correlation between your money management history and how high your premium will be. The lower the credit score, the higher chance a driver will file more claims or commit insurance fraud. Lower credit scores generally show that a customer is likely to miss a payment, leading to insurers to request that a large percentage of the policy be paid upfront.

5. Driving Experience

Inexperience also plays a big factor in operating a vehicle and understanding how to react to sharp turns, weather, and high traffic areas. Regardless of age, the more experience you gain, the lower your rate will be. Some states such as Tennessee use a point system to track the number of traffic citations you’ve received. Depending on the number of points you’ve accumulated, you could lose your license and also see an increase in your auto insurance rates.

The best combination for the best rate is a consistent, clean driving record.

6. Driving History

Possibly the most well-known contributor to car insurance rates is your driving history. This information directly affects the insurer. The type of offense, which can range from minor violations to major accidents, directly correlates to the increased rate of the premium. A minor speeding ticket may only affect your discounted rates (25% increase), whereas major infractions such as a DUI can nearly double the cost from lost discounts and increased rates (100% increase).

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7. Auto Claims

Accidents happen, we are all human. However, how the accident happened is what insurance companies are interested in. Elements taken into account are the severity of the accident, the at-fault driver, and the history of the driver. Some insurances offer accident forgiveness for good drivers so their first accident will not result in a premium increase.

8. Vehicle Type

Insurance companies have access to vehicle statistics that can provide information such as which models are involved in more accidents or file the most claims. They analyze aspects of price, theft rate, safety, accident rate, and cost to repair parts. For instance, an imported sports car with advanced safety features tells insurances a few things. The driver cares about speed, looks, and high-tech features. This could mean the driver has a higher chance of reckless driving, and imported parts will require expensive specialized services. This could cost a high payout for insurances in the long run.

9. Miles Driven Annually

Is your morning commute 5 minutes or 50 minutes? Are you driving into a populated city or into a rural area? These factors help insurances predict the probability of an accident occurring during your day-to-day activities. If you have a major lifestyle change that affects how often you drive –  let your insurance know, you could save some money.

10. Previous Insurance Coverage

Consistency pays off in the long run. People who have a continuous insurance policy are less likely to be in an accident, which can translate into a better car insurance rate. It doesn’t matter if your previous insurance policy was through another business, but staying with one could earn extra benefits such as a loyalty discount. Were you on your parents’ policy? Let your insurance know so you have proof of prior coverage. Leaving the country or selling your car? There are options such as a non-owner’s auto policy available at a much cheaper rate.

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If you’d like to discuss what options you have for car insurance in the Tri-Cities, contact McInturff, Milligan & Brooks via the form below or at (423) 639-5171 for a customized quote that fits your needs.

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