3 Factors That Affect Your Car Insurance Rates

3 Factors That Affect Your Car Insurance Rates

Last Updated on March 12, 2024 by admin

There is nothing quite as freeing as taking to the open road—except maybe knowing you’re taking to the open road with high-quality insurance coverage. There are many different factors that go into how much an insurance agency charges you for coverage. Some of these factors you can control and some you can’t, but it’s always a good idea to understand what they are.

1. The Make and Model of Your Car

The make and model of your car is one of the biggest factors that determine the cost of your car insurance. For example, the average insurance cost for Dodge Charger is typically more than the average cost to insure a truck. On the other hand, a sports car of any kind will be more expensive than a more traditional family four-door model. Even whether your car is more likely to be stolen can affect insurance rates. Honda Accords and full-size Ford pickups are statistically more likely to be stolen and therefore more expensive to insure.

2. Your Personal Characteristics

Several of your personal characteristics, including your age and gender, will factor into how much you can expect to pay for car insurance. The younger and more inexperienced that you are as a driver, the more risk an insurance provider takes in covering you. As you get older and gain more driving experience, you can expect to spend less. However, once people reach the age of 65, rates start to go up again.

Gender could be a factor as well. When people are younger, men are statistically more likely to get into an accident, which means they can expect to pay more for insurance. As people get older, though, women are more likely to be in a wreck and therefore end up paying more for coverage. However, a few states have laws that don’t allow agencies to charge differently based on gender.

Other personal characteristics that may factor into your rates are your marital status and your education. Married drivers typically pay less than those who are single or divorced, and some experts believe the more education that you have, the less likely you are to file a claim. This means lower rates. However, setting prices based on education is under more scrutiny these days and some states are no longer allowing it.

3. Your History of Traffic Violations and Accidents

Another big factor when it comes to your insurance quote is whether you have a history of traffic violations and car accidents and if you do, whether they were high-risk violations or at-fault accidents. In fact, your driving history can affect your rates by as much as 200%. A single speeding ticket is not likely to raise your rates by much; however, if you have multiple speeding violations or if you have tickets for running red lights or stop signs, expect to pay a higher insurance premium. Some agencies only look at your violations for the last 3-5 years, so you may be able to find lower rates if it has been a while since your most recent accident or violation.

While you can’t change how old you are or how much driving experience you have, and you probably shouldn’t get married just for a lower insurance premium, you can control how you drive. Drive safely and keep to the speed limits, and you are more likely to have a premium that keeps your wallet as safe as you are on the road.

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Sophia Anderson
Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.