What Affects Your Car Insurance Rates?
If you compare your car insurance quote with someone else’s, you may notice big differences. Why do the rates differ? Here is a quick overview of some of the factors.
Every car insurance company quotes their rates based on three factors:
- The car
- The driver
- Their goals for their portfolio
How your car affects your car insurance quote:
- Cost to repair (in case of a collision), which depends on:
- Original cost (expensive cars have expensive parts)
- Competition among repair shops (the more independent repair garages and Ford dealers there are in your area, the lower the quoted labor cost to fix your Taurus)
- Availability of parts (if the parts have to be shipped from Europe or Asia, they may cost more)
- Cost to replace (in case of a collision or theft)
- Likelihood of theft:
- Does the car have a smart-key ignition lock? Can it be hotwired easily?
- Is the car a popular 4-year-old that is valuable as spare parts?
How you affect your car insurance quote:
- Your driving record:
- The longer you’ve driven safely, the less likely you are to crash your car
- The more traffic violations, the less the insurer will trust you
- Likelihood of collision:
- Do you live in a crowded city or a wide-open countryside?
- How far do you drive daily?
- Your driving record – how many collisions and violations in recent years
- Your age and gender: statistically, young men are likely to speed and crash
- Likelihood of fraud:
- Do you need the money? Do you need to get out of your loan or lease commitment?
- The insurance company may consider your credit score in setting your rate.
- Likelihood of theft:
- Are many cars stolen in the neighborhoods where you live or work?
How your insurance company’s goals affects your car insurance quote:
- Every company wants to insure people who pay premiums promptly and won’t make claims.
- Some companies want to avoid the riskier situations, so they set lower rates for the best drivers and much higher rates for the riskier drivers.
- Some companies are willing to take the risks, so they set their rates somewhere in between – so they attract the riskier drivers, but find ways to still make their profit.
You could change cars or move to another region to change your car insurance rate. But you can do something straightforward, at no cost, before you renew your car insurance: Get some competitive quotes. Different car insurance companies charge different rates, to manage their portfolios. Find a company that will charge you a lower rate. For example, carinsurancequoter.com lets you obtain quotes from a family of insurance providers – at no cost or obligation. We let you obtain quotes from a family of insurance providers.