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9 Factors That Determine Car Insurance Premiums

Paying for auto insurance is hardly a one-and-done deal. There are lots of factors that contribute to determining car insurance rates, including how much you’ll be paying for your insurance premium. If you’re unsure why you’re paying the price you’re paying for your premium, check out the list of factors that determine car insurance premiums below.

1. Annual Mileage and Vehicle Usage

Statistics show that the more you drive your car, the more likely you are to get in an accident. If you’re driving long distances on a regular basis, you’ll likely be looking at higher insurance premiums. On the other hand, if you drive less than 7,500 miles per year or your daily commute is less than 10 miles one way, you may qualify for low mileage discounts

2. Type of Car

Most people choose a car based on how the car makes them feel or based on what they can afford, however, that choice can and will affect insurance premiums. Insurance companies take into account the safety rating of your vehicle and if your vehicle is considered safe, you’ll pay a lower premium . In contrast, you can expect a higher premium for a flashier car like a luxury coupe or a sporty convertible.

3. Where You Live

If you live in an area with a high crime rate, you’ll likely pay a higher car insurance premium than you would if you lived in an area your insurance company deems safer. If you regularly park your car in a dangerous neighborhood, your car is at a higher risk of theft and insurers will raise your premiums accordingly.

4. Your Driving Record

Your driving record, be it model or less-than-perfect, will affect the price of your insurance premium. If you’re hoping to pay less for your premium, the fewer points or incidents on your record, the better. However, if you’ve already racked up tickets or accidents on your driving record, a lower insurance premium may be out of your reach.

5. Your Age

The rate of crashes and death for teen drivers is much higher than adults. Because of this, you shouldn’t be surprised that drivers under the age of 25 are more-than-likely going to pay a higher premium for your car insurance cost. However, know that the older you get, the lower your rates will be over time as you maintain a good driving record.

6. Your Gender

You may cry sexism for this contrast in insurance premiums, but numbers don’t lie. Because men are more likely to end up in an auto accident than women (based on accident statistics), men can expect to pay a higher insurance premium than their female counterparts.

7. Your Credit

Credit affects your ability to purchase a car, your ability to own a house, and it also affects your car insurance premiums. As you can imagine, the higher your credit score, the more likely you’ll have a lower insurance premium. Additionally, if your credit score is tipping somewhere between average and lower-than-average, be prepared to pay a higher premium. The reason for this isn’t based on credit score alone, but based on statistics that show drivers with lower credit scores are more likely to get in accidents, get ticketed by cops, file fraudulent insurance claims, and more.

8. Your Marital Status

The idea of a married person being more responsible than an unmarried person may be somewhat of a stereotype, but it’s one that many car insurance companies subscribe to. If you’re married, you can bet on paying a lower car insurance premium. If you’re single and especially if you’re under the age of 25, you’ll be looking at higher car insurance rates than if you were married.

9. Type and Amount of Coverage

The type and amount of coverage you choose will affect your insurance premium. If you chose full coverage car insurance or opt for higher coverage levels than are required in your state, you can expect a higher insurance premium. Conversely, if you select the minimum required coverage, you’ll pay a lower insurance premium.

Knowing the elements that contribute to insurance premiums costs, you’ll want to pay as little as possible. Our helpful agents at Freeway Insurance can get you the affordable coverage you’ve been looking for. Get your free auto insurance quote online in minutes or over the phone at (800) 777-5620.