A rating factor is a unique characteristic of a customer that is used to calculate car insurance premiums. Simply put, the lower the riskiness of your rating factors, the lower the cost of your car insurance policy. Some auto insurance rating factors, such as driving record or vehicle type, have a significant impact on car insurance costs. Others, such as gender or marital status, are less significant.
Your car insurance premium is determined by more than just the company you choose. Other factors that can influence how much you pay for auto insurance include:
Age: has a significant impact on your car insurance premium, with teenagers paying the most. This is why, rather than having your teen get their own policy, it may be advantageous for parents to insure teenagers. Car insurance rates begin to fall as you enter your 20s and 30s. However, rates may begin to rise again after the age of 70. Some states prohibit the use of age as a rating factor.
Gender: Males tend to pay higher rates than females due to a higher likelihood of being involved in more and more serious accidents
Vehicle type: Another important factor in determining how much you will pay is the vehicle you drive. Some automobiles are less expensive to insure than others.
Credit score: It may come as a surprise, but your credit score can affect your car insurance premium. Drivers with poor credit file more claims than those with good credit, so insurance companies charge higher premiums to compensate for the increased risk. Credit may not be used as a factor in determining your rate in all states.
Driving record: If you have a history of accidents, tickets, or DUI convictions, you will most likely pay more for insurance
History of insurance: Drivers with continuous insurance pay less than those with gaps in coverage or no insurance history.\
Coverages: The coverage and levels of coverage you select will affect your premium. Higher levels and more optional coverages will generally cost more.
Discounts: You may be able to lower your premium if you qualify for one or more car insurance discounts
If you are married, you may be able to save money on car insurance. Additionally, if you are a member of the military or a veteran, you may be eligible for specialised discounts or less expensive coverage options.
Car insurance rates by state
In addition to the factors listed above, the state you live in has a significant impact on your car insurance premium. The minimum coverage laws in your state, the likelihood of being in an accident, the average severity of accidents, and the percentage of uninsured motorists can all have an impact on the average car insurance cost in your state.
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