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5 Things That Can Affect Your Auto Insurance Rates

    3 minute read

    Finding the best auto insurance rates can seem like a challenge. You might have been quoted one rate while a friend or loved one tells you that they’re paying something completely different. While it may not seem fair on the surface that rates differ, there is a method to the madness. Auto insurance companies use a variety of factors to determine what they’re going to charge for automobile insurance. Your understanding of what they consider could put you ahead of the game. Here are just five things that can impact your auto insurance rates.

    Where You Live

    Most insurance is rated (priced) using zip code as a determinant. According to the National Highway Traffic Safety Administration (NHTSA) a majority (52%) of accidents happen close to home so this makes perfect sense. If a certain city or neighborhood has higher than average accidents and vehicle thefts, insurance companies are going to charge people that live in those areas more for auto insurance. The insurer will also look at rates of uninsured drivers in the area and the average cost of repairs when determining auto insurance rates.

    Your Driving History

    In California, your age isn’t a factor in the amount you pay for auto insurance. Instead, an insurance company will look at the number of years you’ve been driving. Obviously, a long driving history with no accidents, tickets, or claims is going to net you lower auto insurance rates. If you’ve been involved in some accidents, particularly if you were at fault, you can expect your rates to increase. If you do have blemishes on your record, they will lessen in importance over time.

    Demographic Factors

    Insurance companies have determined over time that certain types of people are less risky than others. For this reason, your auto insurance premiums may be lower (or higher) based on such factors as your gender, marital status, and credit score (CA does not look at credit scores, however). An insurance company may also adjust your rates based on your level of education and your occupation, with some trades being considered safer than others.

    If this is your car, you’ll be paying more for auto insurance.

    Your Choice in Vehicle

    The type of car you choose to drive is probably going to have a significant impact on your auto insurance rates. You might think that you’re making a conservative choice with a Honda Accord or Honda Civic, but those two vehicles happen to be the two most stolen cars of 2015. If you must have a new sports car, expect that your auto insurance rates will reflect your choice. Insurance companies look at other factors such as vehicle safety ratings, vehicle size, age of the car, and costs to repair.

    Policy Coverage Choices

    Your particular coverage choices are going to affect your auto insurance rates. While most states, including California, have minimum coverage limits that you’ll need to carry, this often isn’t sufficient protection. You want to strike a balance between protecting yourself against a large liability claim and having affordable auto insurance. With the right amount of coverage and a reasonable deductible, most people are able to achieve the goal of protecting themselves and their vehicles.

    Not many people are excited about paying for auto insurance, but this important coverage is just another expense tied to owning a vehicle. Once you understand the factors that affect your auto insurance rates, you’ll be ready to shop for the best car insurance rates. Get started now with our auto insurance quote tool.

    The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.