Car Insurance Rate

The Most Commonly Used Factors That Affect Your Car Insurance Rate

It may be a surprise to some that shopping around for car insurance can produce many different rates depending on the company. This is due to the fact that different car insurance companies use various weighing factors to determine the price that they quote a potential consumer. Let’s take a look at the most common personal factors that are used by most insurance companies to determine your rate quote.

Your Driving History 

Every insurance company, without a doubt, will be looking into your past driving history to factor a quote. Your driving history is a very effective way to judge how your future driving habits will be. If you have a long history of speeding tickets, accidents, and other negative factors, you are going to receive a high quote or be told they won’t insure you.

Driving Usage 

Your driving usage consists of how much you intend to drive your vehicle. Car insurance providers will typically ask for an annual mileage quote or your daily commute mileage. Those who drive fewer miles are going to receive a better rate as there is less of a risk of them being involved in an auto accident.

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Personal Information 

There are many small factors that are thrown under this broad term, which is considered in figuring your car insurance rate. Your age, place of residence, and occupation are all going to affect your car insurance rate. The insurance company bases their premiums off of statistical evidence that correlates these different attributes with risk. Let’s look at a couple of examples to help you to better understand how these affect your car insurance rate.

Teenage drivers are statistically three times more likely to be involved in a vehicle accident than any other age group. This translates to the fact that teenagers are going to cost more on average to insure than adults. Those who live in high crime areas are going to get charged more as the risk of vehicle theft is increased.

Type Of Policy You Choose 

Different insurance policies come at different rates. The more coverage you seek, the more you are going to pay for it. This is simply due to the fact that if a claim occurs, the insurance company is going to have to pay out more money for the claim. The deductible also plays a big role in the price of your monthly premiums. The lower your deductible, the more you are going to pay in your premiums. Conversely, the higher the deductible that you agree to, the lower your monthly insurance premium payments are going to be.

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