Skip to Content

Top Factors That Affect Car Insurance Rates

Tuesday, November 16, 2021

How many ads and commercials talk about saving money on car insurance? It seems that there are dozens of companies touting their savings, but the bottom line is many factors influence the amount you spend on insuring your vehicle. Everything from your location to your choice of model can and will determine your auto insurance expenses.

Here are a few factors that affect car insurance rates. This could be why you may be paying more than your next-door neighbor when it comes to protecting your automobile. 

State Laws & Location

The baseline for calculating your costs for vehicle insurance starts at the state level. Some states have higher rates due to requirements for limits of protection and the statistics of higher claims. Within each state, there are differing rates for rural and urban policies. Based on the numbers, busy cities support more people and transportation, so the odds are higher for accidents.

If you compare car insurance rates in Rock Hill, SC to Charlotte, NC, for example, you would expect the smaller population town of Rock Hill to have lower rates. Because North Carolina has laws limiting insurance pricing, though, it is often cheaper to insure in the dense urban city of Charlotte than the much smaller towns just over the border in South Carolina. Across the United States, the policy rates vary widely, and it is worth exploring the issue if you are considering a move.

Age & Credit history

Age discrimination is alive and well in the insurance industry. Statistics are not your friend if you are a new young driver or a seasoned older driver. Rates are highest starting in your teens and begin to fall in your twenties. The lowest rates offered are for the mid-years to about 65; rates start climbing again as you get older. Being young and considered impulsive will cost you, and being experienced but older will cost you too, so try to enjoy those years in between and celebrate your middle of the pack status! 

While you are looking at those age issues, be aware of your credit history. Every misstep in your financial world is on a record somewhere, and anything that makes you appear to be less than responsible will skew the odds against you. Keep your credit healthy if you want to save money on financial obligations in your life. 

Gender & Marital Status

Luckily, the only time gender is considered for auto insurance rates is for teenagers—the numbers game trends to teenage boys taking more risks when driving than teenage girls. The law sides with the statistics, and there is currently nothing you can do about that kind of bias. 

There are no advantages when it comes to being single versus married. You may find a break in costs by bundling insurance coverage for your property and multiple vehicles. 

factors that affect car insurance

Driving Record & Claims History

Everyone knows that accidents and claims will raise your insurance rates. Some of your accidents or damage history will disappear over time, but drunk driving is difficult to overcome. The more claims you make, the higher the risk of being denied insurance from an affordable company. Points or infractions on your driver’s license equals more money out of your pocket. Speeding tickets, fender benders, and just being the victim of another reckless driver are factors that will raise your policy prices. 

Car Type & Mileage

When it is time for a new vehicle, there are several considerations you should bear in mind. Take the time to do your research when you consider the make and model of your next car. A high-end model will cost more to repair, so rates are higher. Decisions about paying cash, leasing, or financing through a lending institution will also determine how much you pay for coverage. Once you outright own your automobile, there are more options for finding ways to lower your costs. 

One final issue is your yearly mileage. If you put a lot of miles on your car, you are going to pay more. If you now work from home, you may want to contact your agent to discuss any changes in your annual mileage.

At Independent Insurance Associates, we look at every aspect of your car insurance needs. Because we work with many major insurance companies, we offer the best pricing for your particular insurance requirements. Contact us today to review your existing policy, or let us work on a new quote to help you find the best rate for your automobile insurance.