Factors That Impact Auto Insurance Rates

Car insurance is a necessity for every driver on the road. It is mandated by New York State law that all drivers must have auto insurance to register and operate a vehicle. Insurance is not a bad thing though because it helps protect your vehicle financially in case of theft, accidents, and damage. However, the monthly premiums of insurance can vary from driver to driver based on numerous factors. In this blog post, we will discuss those factors to help you make an informed decision when purchasing your new auto insurance policy.

1. Age and Driving Experience: Age and driving experience are used to determine car insurance premiums for drivers. In general, the younger and less experienced you are, the more of a risk you are considered to insurance companies. That is because statistically, younger drivers tend to be in more accidents and file more claims. Thus, they have higher insurance premiums.

2. Driving Record: Your driving record is one of the major factors used to calculate your insurance premiums. A clean driving record with no accidents and no traffic tickets is ideal. If you have a history of auto accidents and traffic tickets, your insurance rates will go up. Always practice defensive driving skills to prevent any collisions.

3. Vehicle Type and Value: The type of vehicle you drive and its value can impact your insurance rates. Expensive cars or vehicles with high repair costs generally have higher insurance premiums. Additionally, certain vehicle models may be more prone to theft or have higher accident rates, which can also affect insurance costs.

4. Location: Where you live influences your rates. If you live in an area where car theft, vandalism, and collisions are common occurrences, your rates will be higher because of the increased risk of a claim being filed. Additionally, high-traffic areas like the inner city tend to have more expensive premiums than rural areas with less traffic.

5. Coverage and Deductibles: The level of coverage and deductibles you choose impact your rates. Choosing lower levels of coverage and higher deductibles will cause your premiums to decrease, while higher levels of coverage and lower deductibles will increase your rates.

6. Credit History: In some regions, insurance companies may consider your credit history when determining your car insurance rates. Studies have shown a correlation between credit history and the likelihood of filing insurance claims. Maintaining a good credit score can help lower your insurance premiums.

7. Annual Mileage: The number of miles plays a role in the cost of insurance. Generally, the more you drive, the more likely you are to be involved in a car crash. Therefore, you want to minimize how much you drive to lower your chances of being in an accident and lower your insurance premiums.

8. Discounts and Bundling: If you have multiple insurance products like life insurance, homeowner’s insurance, and auto insurance, you should consider bundling them under the same insurance provider. Insurance companies typically offer discounts for bundling multiple products together with them. Additionally, seek out discounts like good driver, good student, loyalty, and defensive driver course discounts. 

9. Gender and Marital Status: While the impact of gender and marital status on car insurance rates varies by region, some insurance companies may consider these factors. Historically, statistics have shown that certain demographics may have different risk profiles, which can influence insurance premiums.