Factors That Affect Your Car Insurance Rates If you have ever compared insurance rates with a family member or friend, you may find that you are paying very different amounts for similar coverage. There are many factors that affect car insurance rates that can cause one person to pay two to three times more than another for the same plan. These factors range from personal characteristics to financial habits to vehicle features, but they all have one thing in common: they are considered to be indicators of risk. Insurance companies believe that these factors are indicators for the probability that you will have an accident - and the costliness of the claim when you file. Major Factors Age: Drivers under 25 have the greatest chance of being involved in an accident, while more experienced drivers between the ages of 50 and 65 have the lowest risk. Gender: Statistically, women have fewer accidents than men. However, the difference between the sexes is not as great as it once was. Vehicle specifics: Make, model, year, and engine size all affect your rates. Newer cars and faster, more powerful cars are considered a greater insurance risk. If you purchase an SUV, you can expect to pay more in insurance for a V8 engine than for a V6. Marital status: A married individual will pay less for car insurance than someone who is single. Traffic violations: The more traffic tickets you have on your driving record, the higher your rates will be. Accident claims: While one minor accident may not affect your insurance much, having a history of accidents, even if they are just fender benders, can increase your premiums. Geography: A person living in the city is at a higher risk of having an accident or having his or her car broken into than someone living in a rural, less densely populated area. Credit rating: This may seem irrelevant to calculating car insurance, but insurers claim that there is a statistical relationship between having a good driving record and having a good credit rating. Drivers with poor credit have a higher probability of making claims, and more costly claims, than those with good credit. What You Can Do to Lower Your Rates If you are struggling to afford your car insurance or just want to knock off a percentage of your cost, there are steps that you can take to reduce your rates. Consider the following money saving tips: Drive a less powerful, safer vehicle. Paying for insurance on a small 4-cylinder vehicle instead of a large SUV or sports car can save you a significant sum. Take steps to improve your credit. Getting your spending under control and paying bills on time could improve your credit rating and lower your insurance premiums simultaneously. Ask about the good student discount. Statistically, students with better grades also have better driving records. If you or someone covered under your insurance is a student, keeping those grades up can knock digits off your coverage costs. Drive safely. Taking fewer risks on the road reduces your chances of getting a traffic ticket and also lowers your risk of an accident. Maintaining a good driving record could result in lower rates. Another great way to find affordable insurance is to shop around with different companies. You are not obligated to stay with one provider for car insurance. Today there are businesses that will assist you with the comparison process and will help you find affordable coverage that meets your needs.
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