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Top 6 Factors That Influence Your Auto Insurance Rate

Having car insurance serves a lot of benefits in so many ways. It gives you peace of mind knowing that you are insured in times of unfortunate events.

Paying for a policy is part of owning a car, and it’s just normal to think about how to lower its cost.

Auto Insurance Rate

You can choose to reduce the coverage and pay higher deductibles.

However, these factors are not the only ones that influence your premium. You may not realize it, but your insurance provider will assess you based on different factors that impact the rates. It’s essential to know what components affect the premium to help you decide when purchasing insurance.

1.  Demographic Factors

You may not be aware, but your age, gender, marital status, location, job, and credit score affect your insurance premium in different ways. Statistics have shown that young men usually incur higher rates than young women because more male teenagers have been into accidents than females.

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However, there are also pieces of evidence that suggest that older women are more prone to minor incidents compared to older men. Marital status is also being considered in the risk assessment. Married drivers tend to have fewer accidents compared to single people.

The location of where you live greatly affects your rate. If you live in more densely populated neighborhoods with more cars, it’s a high risk for you to get involved in a collision, theft, and accidents. According to experts at, it is also important to consider the traffic congestion of the area, where you frequently drive, and the mileage.

Most of the insurance companies will look into the same factors, but they offer different pricing. That’s why it is vital to compare the cheap insurance quotes of various providers to prevent overpaying.

2.  Your Vehicle

The type of car you own significantly affects your rate. For instance, if you have a luxury vehicle that is more likely to be stolen and will cost more to repair. If your car lacks safety features to prevent accidents, this would result in a higher premium.

The safety features include airbags, automatic seat belts, and traction control just to name a few. Apart from these components, the vehicle size also contributes to the rate. Larger cars are usually safer from accidents than small ones.

3.  Driving Experience

For drivers with a history of accidents and traffic violations, they have to expect an increase in insurance premiums. If you have made several claims because of negligence and violations, you are making an impression on your insurance company that you’ll likely make another claim. Therefore, your policy cost is much higher compared to other drivers. In extreme cases, if your driving record is bad enough, some insurance companies may refuse to provide coverage.

4.  Where You Keep Your Vehicle

Your insurance premium would also vary whether you have a garage or just keep the car on the street overnight. This is because of the risk of the vehicle getting bumped, damaged, and stolen at night. Parking at your garage is obviously more secure rather than the streets. You can also improve your insurance rating by having an alarm installed in your vehicle.

5.  Inflation

Premiums are likely to increase over time because of inflation. In case of an accident, the costs of repairing the car increase regardless of its age. The parts, labor, and other materials will increase as time goes on. Replacing a bumper of a one-year-old car would be the same for the brand new one. Insurance companies assess the possible costs of future claims, and it commonly results in a higher premium.

6.  Your Usage


Your annual mileage contributes to a higher insurance rate. If you drive lots of miles, you are more likely to be involved in accidents due to the longer time you spend on the road. As a result, you will pay a higher price than someone who travels less.

However, there are insurance companies that offer coverage for a certain mileage with a base amount, and additional costs may apply for the additional miles driven.

Paying your car insurance will not just protect the vehicle itself, but it would protect you from unnecessary expenses. In extreme cases, it will save you from a lot of stress if your car has been stolen, totally damaged by natural disasters, and a lot more.

It’s a common thought to find ways to lower down the insurance costs. However, reducing the coverage is not a practical thing to do. Learn the controllable factors affecting your premium, and you can save a few dollars.

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