What Determines Your Auto Insurance Rate?

What Determines Your Auto Insurance Rate?

The average cost for auto insurance in the United States is $900 a year. However, that rate can vary a lot depending on many factors.

Read on to learn what factors determine your car insurance rates and what you can do about it.

The Car You Drive

The price tag on your car will impact your car insurance rates. Especially if it’s a big SUV with a ton of technology.

Let’s say you get into a small fender bender. Well, just to replace that bumper with all that tech (sensors, cameras and so on) can reach up to $2000. A small, older model car that’s tech-free might only cost $500 for a new bumper.

Insurance companies take into account the price of repairs when they provide you with car insurance quotes. If repairs on your car cost more, so does your premium.

Yet, sometimes older cars are more expensive to insure than newer ones based on vehicle safety ratings and accident severity history.

Safety Ratings and Track Record

You rate also depends on if you are driving a common car or something new. Insurance companies keep track of which cars have reoccurring mechanical or safety issues. If your car doesn’t have a great track record or is a common target for thieves, you can expect to pay more. Also if your car is new and hasn’t had time to prove itself, your insurance rates will also be higher.

Each car’s safety rating also plays a factor in car insurance rates. Auto safety ratings are set by the National Highway Traffic Safety Administration. The better the safety rating on your car, the lower your premium.

However, insurance companies don’t just take the administration’s word. They also compile data about their claims to make their own analysis of which cars are most frequently involved in claims.

A poor safety rating will usually mean a higher premium for you.

Anti-Theft Device

If your car is equipped with any kind of theft deterrent, it will save you a few bucks on your monthly insurance premiums.

A car alarm or a tracking device will likely make your car less appealing to thieves. And so that results in insurance savings for you.

Size of Your Car

You may assume that a smaller car would mean a smaller premium. But that’s not necessarily true.

Often, larger cars like SUVs have higher safety ratings. That can mean lower premiums.

Your Driving History

One of the biggest factors in determining your insurance rates is your driving history. Insurance companies know that past performance predicts the future a lot of the time.

So if you’ve had speeding tickets, collisions, or other violations in the past several years, you will pay for it through higher rates.

On the flip side, a spotless track record on the road will save you a bundle on your car insurance premiums.

Your Gender

It sounds biased, but insurance companies may use your gender to assess your risk level.

Calculating risk involves using previous data to estimate how likely it is that you are going to be involved in a car accident.

Statistics show that women tend to drive fewer miles than male drivers. They are less likely to get a ticket for speeding or driving under the influence.

Men tend to buy cars that are more expensive and are more likely to get into a collision. That’s why car insurance companies typically charge men more for insurance.

Do the stats really back up this gender preference? Yes, they do.

The World Health Organization states that of all traffic deaths, 73% of them are males under the age of 25. That is a huge majority.

In fact, males are three times more likely to be killed in a crash than females in this age group.

This brings us to the next factor that determines your insurance premium: your age.

Your Age

Drivers, both male and female, under 25 years old will pay a higher premium until they reach 26 years old. Yet, the rates for young males will still be much higher than young females.

Once drivers hit 26, the insurance companies will trust that these drivers are safe on the road. At this point, the rates level out between the genders. But males will still pay a little more than women.

How Much You Drive

Do you have a 90-minute commute or do you work from home? It will make a difference in your car insurance rates.

It’s logical, really. If you spend less time on the road, you are less likely to be involved in a crash. The more miles you drive, the higher your risk of damage to your car.

Where You Live

Your address is also a factor that insurance companies consider.

Heavily populated urban centers tend to have higher theft, crash and vandalism incidents. That means you will pay more to insure your car.

Maybe this is the push you need to move into a suburban area that is safer for your car.

Bottom Line on Auto Insurance

Thanks for reading. We hope this post has helped you understand the various factors that affect your auto insurance rates.

Though you can’t control your gender, age and may not have much choice in where you live, you can control some things.

How much you drive and the car you choose to drive is up to you. And, as you practice good road safety, your clean driving record will help you get a low rate for years to come.

Ready to get a quote? Mathenia Insurance Group is ready to help drivers save on their car insurance in St. Louis and the surrounding Missouri area. Let’s get started.

Call Email Quote Payments