Factors Affecting Car Insurance Premium and How to Lower it

by MarketProSecure

There are many factors that affect your auto insurance premium. Each is a statistically based risk for a specific population. The higher the risk associated with a person, the more he or she is likely to pay for coverage. Below are elaborated some of the risk factors, but there are numerous others, including miles driven per year, driver's gender, purpose for using the vehicle (commuting to work, using for work, leisure only), etc.

Factors you CANNOT change that affect your car insurance rates:

• Your Gender
  Women are statistically safer drivers (sorry guys).
• Your Age
  Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
• Your Marital Status
  A married person will pay less than a single person with an identical driving record.

Factors you CAN change that affect your car insurance rates

• Your Vehicle Type
  A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
• Your Credit History
  Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium.
• Your Location
  Where you live and work makes a difference. Folks living in certain areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
• Your Accident Claims
  A driving record that is clean and free of accidents will hold fare better for you than lots of tickets and/or accidents.
• Your Occupation
  Insurers have statistically found a correlation between your occupation and risk of filing claims. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
• Your Driving Violations
  Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.

Other factors that help determine car insurance premiums:

• Years of driving experience
• Driving distance to work
• Miles driven annually
• Whether or not you currently have car insurance
• Business use of the vehicle
• Multiple cars and drivers (another opportunity for discounts)
• Rather or not you have taken safe driving courses
• Theft protection devices (often results in discounts)

What can I do right now to make sure I have the car insurance lowest premium?

Shop around and compare car insurance quotes from different insurers. They base their premiums on their claims experiences, which naturally are different. One company may see your area as a higher risk than others may not. Another may charge more because of your occupation or driving distance to work.

Click Here For Low Car Insurance Premium Quote

Published: November 23, 2007

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