Personal Demographic And Car Related Factors Affect Car Insurance Rates

There is no magic formula in which you can lower your car insurance costs because the insurance companies are hell bent to make profit by doing business with you. Well, that does not mean they will do it by hook or by crook but you will seldom get what you want from them provided you are not knowledgeable, confident and do not negotiate on the terms while shopping for car insurance.

Reducing the car insurance rates is the common want of all car owners but it is not always easy to succeed in this process. Most people either raise their deductibles or choose a lower amounts of coverage which are, of course, the two most palpable factors that affect the cost of auto insurance.

However, you may not comprehend that the overall rate of your car insurance is also affected by a number of different factors. Only a few of these factors can be controlled by you and most of which you cannot. A lower price tag will generally lead to a lower insurance premiums but that is not the only factor that you should consider.

Therefore, it is only when you know the facts and factors that affect your car insurance rate you will be able to make a more informed choice while purchasing car insurance. Such knowledge will also help you to know what exactly you can do to lower the cost of your car insurance and your yearly expenses.

Personal driving habits

If your personal driving record has blemishes then it will affect your car insurance rates. If you have received tickets, have been in accidents, or even have made auto insurance claims previously, these will be treated as red flags by the insurance companies to determine the most suitable insurance rate.

Though these marks over time will become less important, the driving activity, the distance your drive, what you use the car for, and when and where you drive, time spend on the road, and keeping your car in a garage will also affect your car insurance pricing.

The demographic factors

Surprising as it may seem, you demographic factors will affect your car insurance rates in a great and different way.

  • Gender and age: It is proven statistically that young men normally incur higher car insurance rates as compared to young women. This is because male teenagers have more accidents than the female teenagers. On the flip side, older men usually get better car insurance rates than older women as the number of accidents, minor as it may be, is more in case of older women than older men, though the differences in the insurance premium costs are not usually drastic.
  • Marital status: When it comes to car accidents it is found that single people tend to have more accidents as compared to the married people, especially men. However, simply getting married before you buy a car will not lower the rate of insurance premium significantly because the insurance company will also your previous driving history that should be clean and free from accidents. It can really halve your insurance costs.
  • Location: Living in an accident prone zone with heavy traffic and congestion, more densely populated neighborhoods with more cars, risks of theft, car ‘sleeping’ on the streets, cost of repairing cars in the area, urban areas with high unemployment rates resulting in more uninsured drivers, all can affect your car insurance rate.
  • Credit score: Your credit score may also be considered by the insurance companies when determining your insurance rate. In general, a lower score will fetch higher insurance premiums.

Lastly, your profession will also play a significant part in determining the auto insurance rate as it will have a distinct relation with the risk of accident. Journalists and delivery drivers will stay more on the road and will therefore have higher rate of insurance premiums as compared to the airline pilots for example who simply drive between their home and airport. Other professions that have low premiums are police officers, nuns, paramedics, insurance underwriters because they are more careful than any average driver.

Car related factors

The car you own will also affect the insurance rate significantly. Few cars may be likely to be stolen more than the other models while few may lack safety features in them to prevent accidents or even the cost of repairs and replacements of a few cars can be more. All these will affect the price of your car insurance. Hence the insurance companies will consider these following car related factors to determine the final price:

  • Safety rating: This will include need to pay medical bills for you or the passengers, your likelihood of getting into an accident, likelihood of a passenger getting injured in case of an accident, inclusion of airbags, traction control, automatic seat belts, and others.
  • Vehicle size: It is considered that the larger cars are safer than the smaller ones in an accident and therefore have lower premiums due to its high safety ratings. On the other hand, cars having larger engines comparative to its body size will have higher rates such as a sports car with a V8 engine.
  • Age of the car: Since older vehicles will malfunction more, more will be the repair costs. Moreover, there is an increased likelihood of the older cars being ‘totaled’ in an accident. In such cases the cost of replacement will be much more than the market value of the older car, insurance rates differ as compared with the newer cars.

Likelihood of fire, theft, fire, weather conditions and vandalism will also affect the rate of your car insurance.

When you negotiate with the car insurance provider for a lower rate, all these facts and knowledge will help you in the process. Also make sure you look for additional discounts, have purchase renters and homeowner’s insurance to bundle, and use fraternal group associations or alumni to get discounts. Last but not least, make sure that you check competitor prices to make sure you do not pay too much for your car insurance.