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3 Things That Impact Your Car Insurance Rates



Owning a car is a big responsibility and when you add insurance to the mix, things get even more complicated. There are just over 215 million insured cars on the road, so you would think that the majority of people know what they are doing when it comes to insurance. However, the insurance buying process is well known to be one of the most confusing processes. Many people end up choosing the first insurance company they get a quote from without doing much research. This article will focus on the small things that may impact your rates and help you to get better coverage in the future.

#1: Location

Insurance companies are all about assessing the amount of risk that a customer will face and create. Auto Insurance companies use a strict risk assessment system to score and analyze specific zip codes and their level of risk. An area with high traffic congestion and higher numbers of reported accidents will impact your rates when being insured in the area. It should be easy to tell based on your location if it is high risk or not. If you live in a bedroom community and commute 5 minutes to work (shown through mileage reports) you are considered lower risk than someone that lives in an urban area and has a longer commute. These are all factors to consider when purchasing a vehicle and shopping for insurance.

#2: Age

Auto insurance companies have to consider the capabilities of the person behind the wheel when insuring a vehicle. It is statistically shown that the younger the driver, the more likely that they get into fender benders and accidents than experienced drivers. But this does not only apply to young people, as people who are 75 plus pose a higher risk on the road. In 2018, nearly 700 elderly people were killed a day in auto accidents, according to the CDC. Because of these shocking statistics, insurance companies have to assess risk and adjust their rates accordingly.

#3: Gender

This may surprise people to learn that gender is commonly considered as a risk factor in many states when giving auto insurance rates. In 2019 71% of motor vehicle deaths were men, according to IHHS.org. Statistics like these are often considered as strong factors that contribute to auto insurance rates. There are only a handful of states that do not allow gender to be considered as a factor that affects insurance rates, those are: Hawaii, Massachusetts, Michigan, Pennsylvania, Montana and North Carolina. If you live outside of these states you should research the risk factors based on gender to see if it is a qualifying factor when determining your auto insurance rates.


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