Factors That Affect Your Auto Insurance Rate

A lot of factors affect the price you pay for your auto insurance policy. A lot of factors affect the price you pay for your auto insurance policy. For each individual, the more risk the auto insurance company has to take on, the higher your auto insurance rate.

Listed below are the most common factors that major auto insurance companies use to determine your auto insurance rate:

Age

The older you are, the less chances of being in an accident. In fact, drivers among the 50-65 age bracket are considered the safest drivers. And, statistically, drivers under the age of 25 have the greatest risk of accidents.

Gender

Generally, males between the ages of 16-25 pay 40% more for auto insurance than females the same age group. As their driving experience grows, this rate gap narrows.

Marital Status

If you are married, you get lower auto insurance rates compared to a single person with a similar driving record.

Geography

People living in an area where there is less traffic and a lower rate of auto theft pay less. This is due to the fact that in congested cities, the risk of accidents and theft is higher.

Driving Record

Traffic violations such as speeding and reckless driving will certainly increase your risk factor. As a result, you pay more for auto insurance. However, insurance companies will lower your premium if you remain accident-free for a set period of time.

Vehicle Type

Higher premiums are attached to luxury and sports car models, due to the higher cost to replace and repair. SUV's will also increase the insurance premiums because of the potential damage it can inflict. However, auto insurance companies may give discounts for newer cars equipped with passive restraint systems and airbags.

Accident Claims

An accident-free record leads to a lower auto insurance premium than that of a blemished record since your risk factor is lower.

Miles driven each year

The chance of being involved in an accident increases with the number of miles that are driven annually. Some auto insurance companies offer "low mileage" discounts for those who drive less.

Business use of the vehicle

Compared to personal use, an auto that is intended for business will result to higher rates since it is more vulnerable to many risks.

Whether or not you currently have auto insurance

Expect to pay more if you're applying for the very first time. But if you already have auto insurance, chances are good that you'll get lower rates.

Theft protection devices (often results in discounts)

Autos equipped with anti-theft devices often get a significant discount with their auto insurance premium. Since there is a lower risk of theft, insurance companies will offer you more reasonable rates.

Multiple cars and drivers (another opportunity for discounts)

A lot of auto insurance companies offer discounts for those who insure multiple autos and drivers under one insurance policy.

A Simple But Sure Way to Lower Your Premiums

Despite these factors, there is one certain way to lower your auto insurance rate -- shop around. Remember that there are many companies out there so make sure to compare auto insurance rates. These days, you just need an Internet connection to get an instant online auto insurance quote from multiple companies. Click here to start getting auto insurance quotes from the nation's top auto insurance companies now.