Ever feel like the cost of your insurance is based on a slew of arbitrary factors and number-spinning? The truth is, there are a huge number of factors that influence your auto insurance rates. Some are within your control, and some aren’t. Some insurance companies use all of these factors to determine your rate, and some don’t. A few of the items on this list might surprise you.
Here’s a closer look at the factors insurance companies consider when pricing their auto insurance policies.
Car-Related Factors
The age of your vehicle, the type of vehicle you drive, and even its crash-test ratings can all influence how much you pay for your insurance policy.
Vehicle age: Older vehicles tend to cost less to insure than brand-new ones, and it makes sense; a twenty-year-old minivan has a much lower cash value than one that was manufactured last year. Keep in mind, though, that once you get into the range of antique vehicles, insurance costs can start going up significantly.
Vehicle size: Larger vehicles tend to keep you safer in accidents than small ones–and they’re less likely to be totaled if they’re involved in a crash. This is why a compact car can cost more to insure than a van or SUV.
Safety features: Cars with side-curtain airbags, antilock brakes, and other safety features can save you a noticeable chunk on your auto insurance premiums. Are you buying a new car? Look into newer safety features like lane-change alerts, and ask your insurance agent if they offer discounts for these features.
Car alarms: Cars equipped with car alarms are less likely to be stolen, broken into, or vandalized, so they can cost less to insure, particularly when it comes to comprehensive auto insurance coverage.
Factors Related to Your Demographics
Your age and driving experience impact the amount you’ll pay for car insurance, but other factors–like your education level–can also influence your rates.
Your Gender: According to the majority of studies, women tend to drive fewer miles each year and get into fewer auto accidents than men, so they pay lower insurance rates than their male counterparts pretty much across the board, all other factors being similar.
Your Age: Teenagers and drivers in their early 20’s pay more for insurance than older drivers, and rates start creeping back up again for drivers over 60 or so.
Your Education Level: It might seem discriminatory, but many insurance companies base their rates partly on your education level; those with higher levels of education are statistically less likely to get into an accident than those with lower education levels.
Your Occupation: Some occupations are determined to be more “risky” than others and come with higher insurance rates. Stuntman or pro skateboarder? You’re likely to pay more for auto insurance. If only you had known when you were choosing a career!
Your Marital Status: Married people tend to be considered less risky to insure, and insurance companies often price their policies higher for unmarried individuals than for those who are married.
