Car Insurance Rates: Factors Determining The Car Insurance Rates

While some of the extraneous factors that affect car insurance rates are not in your control, others are, and understanding those other factors can save you a great deal of money. Below you will find helpful information regarding the factors that are considered by insurance companies while trying to determine the rate of your car insurance. These will help you understand important aspects of auto insurance and why some individuals receive higher rates than others. The factors that auto insurance companies consider when determining your rate of insurance can be broken into 3: Demographic Factors, Car-Related Factors, and Personal Driving Habits


Demographic Factors  

Gender and Age

The rates incurred by young men is higher than that for young women.  Statistics have proved that more male teenagers have accidents than female teenagers. Drivers who are advanced in age also generally pay less rates than younger drivers do. At 25 years old, drivers usually see a decrease in their insurance premiums.

Marital Status

Statistically, people who are married tend to have fewer accidents than single people do. Being married can therefore significantly lower your rate.

Where You Live

It has been observed that most traffic accidents happen close to home. Your area of residence significantly affects the quoted rate. Neighborhoods that are densely populated have more cars, and so you are therefore at a higher risk of accidents, theft, and collisions.

What You Do for a Living

The type of job you have can also have an impact on your auto insurance premiums. This is also the result of actuarial studies that found a relationship between certain job categories and accident rates.


Car-Related Factors

What You Drive

Car insurance providers develop vehicle safety ratings by collecting and analyzing industry safety reports. Discounts are then offered to customers who drive safer vehicles.

Age of the Car

The age of your vehicle influences your insurance rates, as the cost of repairing an old vehicle is almost similar to the expense of getting a new one; also, an older car is more prone to being “totaled” in the event of an accident

Likelihood of Theft

Evidently, some cars are more attractive to thieves than others. Insurance companies have made a list of most stolen cars based on statistics, and if your car hits the top 10, it is more likely to have higher rates than one that’s not so high on the list.

Where You Keep Your Car

If your car sleeps in a garage at night, your premiums can be substantially lower than if you have to park it on the street. The reason for this disparity should be quite obvious – many car thefts are crimes of opportunity, and it is much easier to swipe a car sitting by the curb than to break into a locked garage.


Personal Driving Habits

How Often, And How Far, You Drive

People who use their vehicle for business and long-distance commuting commonly pay more than those who drive less. The greater the number of miles you drive in a year, the greater the chances of an accident notwithstanding how safe a driver you are. If you need to regularly drive for long distances, consider joining a carpool, riding your bike, or taking public transportation.

Your Driving Record

If you have been accident-free for many years, you would be required to pay less than a driver who has frequently caused accidents. If you’ve been accident-free for an extended period, don’t get complacent! Stay vigilant and try to keep your good driving habits.


It’s necessary to pay for insurance for your vehicles; however, it’s wise not to pay blindly, with this steps, you know just how your fee is calculated and can try to lower the rates.