People often assume that the cost of car insurance premiums is a constant figure. That’s understandable since most products and services cost the same, especially when buying from the same vendor. That’s why it would make more sense if you realized that two insurance companies charge different car insurance rates. However, the thought of the same insurance company charging two different customers various premiums hardly makes sense to many. Nevertheless, that’s a common case because of the reasons that we will discuss in this article. So, without much ado, we will discuss the various factors that affect car insurance rates. Most of them are also related to saving on auto insurance. Check them out!

  1. Credit Report

A credit score is often considered when determining various things, and auto insurance premium is no exception. What your insurer will need to identify the score is your credit report. If the report is good, it goes without saying that the credit score is great. Consequently, most insurance providers will charge you fair premiums. The outcome is usually different if you have a bad credit score. The insurer will have to get your consent to use this information in most cases. It is also important to note that not all insurance providers consider this factor.

  1. Gender

Going by statistics, male drivers get into more accidents than their female counterparts. They are also more than women drivers who get into accidents associated with driving under the influence. Accidents involving men are usually more severe than those involving women in most cases too. Due to those figures, the car insurance rates insurers offer women drivers are relatively low.

  1. Security Measures

Does your car have a tracking device or a car alarm system? If the answer is a resounding yes, and you have approved ones for that matter, there are high chances of paying lower car insurance rates. Where you park your car, especially during the night, is also one of the factors that can affect car insurance rates. If a neighborhood is prone to hijackings, grabs, smash, car parts theft, and other crimes, your premiums may go up. If the garage remains locked and has guards, the car insurance rates will be reduced. The bottom line is that if the insurer feels that your car is secure, the premiums will be low and vice versa.

  1. Claim History

If it is not the first time you purchase an auto warranty, you have a history. An insurance company will be keen on what your claim history looks like. A claim history offers a conclusive report of the claims you have filed. It also highlights the ones that other people file against you. The longer the number of insurance claims, the higher the chances of paying high car insurance rates. Once your insurer pays out an insurance claim, your premiums will also increase.

  1. Insurance History

Other than the claim history, the insurance company will also look at your trend as far as coverage is concerned. The insurance provider expects continuous coverage if you aren’t a first-time driver. Failure to have such a history makes you fall into the high-risk category. That’s not a good thing as far as insurance premiums are concerned. When licensed yet not insured, it would be hard, if not impossible, to convince the insurance company that you weren’t driving without coverage. Once the insurer is convinced that that’s the case, expect to pay high premiums, no doubt.

  1. Limits and Deductibles

In case of a claim, what’s the maximum amount of money will your plan pay to compensate you? The answer to that is your policy limit, and it is adjustable to meet one’s needs. In most cases, the higher the limit, the higher the car insurance rates, and vice versa.

On the other hand, we have the deductibles you are willing to pay before your insurance provider comes in when the need to pay for a covered loss arises. If your deductibles are quite high, expect the premiums to be relatively low.

  1. Type of Coverage

Expect to find several types of auto insurance coverages. In addition to that, the car insurance policy requirements vary from one state to another. So, to a great extent, the type and the number of coverages you purchase depends on the state you live in. In most states, liability coverage is quite common.

Other typical coverages include personal injury protection or medical payments, uninsured or underinsured motorist coverage, collision coverage, and comprehensive coverage. The optional ones include sound system coverage, rental reimbursement, labor, and towing costs. Remember that the type of coverages you choose or have to pay determines your car insurance rates.

  1. Age

It is one of the factors that can affect car insurance rates for a good reason. The most favored group is middle-aged. After all, statistics show that very old and quite young drivers are usually involved in accidents often. For that reason, their car insurance rates are usually high. The rates of young drivers decrease over time, and those of their old counterparts increase as they age.

  1. Driving Record

When it comes to auto insurance premiums, insurance providers will reward good drivers and won’t hesitate to punish the bad ones. They will use your driving history to determine where to group you. How often have you had convictions or moving violations following reckless or drunk driving? The more the times, the higher the car insurance rates and vice versa.

  1. Type of Car

Various car models and makes have seen some car owners pay more than others. An excellent example is a sedan owner paying more than a hatchback one. That’s because the premium value of the former is higher than that of the latter. What determines a car’s premium value includes the type, engine cubic capacity, and car’s manufacturer, but to mention a few. So, a difference in the model, make, or variant will significantly impact the car insurance rates.

Besides the make, the vehicle’s age also matters. Old cars are prone to depreciation and IDV. Due to the natural tear and wear, an old car depreciates and loses its original value. Once the current market value of a certain car increases, the premiums will most likely decrease.

Final Words: Factors that can affect car insurance rates

The next time you see two vehicle owners paying different car insurance rates, you will not be surprised. After all, you are now aware of the different factors that affect car insurance rates. The insurance providers will pay attention to these factors and determine the premiums you get to pay. Due to the various options, there are high chances of confusion. Fortunately, you can always go to FindMyQuotes. It helps you choose the right car insurance for your needs and pay the best rates possible.