Although the two main factors that affect the cost of insurance are deductibles and amount of coverage, the overall rate is usually influenced by many other factors. Some of these factors are easily controllable while others are entirely out of our hands. Therefore, having information about the factors that affect your insurance rates can help you know what to do to reduce your expenses and make informed decisions when looking for affordable insurance.
1. Car-related factors
What is your vehicle safety rating? A higher vehicle safety rating translates to lower insurance rates because such vehicles have a lower chance of getting involved in accidents. Also, large cars are considered safer compared to small cars since they generally have a higher safety rating. However, vehicles with massive engines – such as V8 engines – relative to their body size tend to have higher rates than those with smaller engines.
The age of your car also has an impact on the affordability of your insurance. This is because the cost of repairing an old car is often higher than the value of the entire vehicle.
2. Demographic reasons
Young men tend to incur higher insurance rates compared to young women, while married people and older men usually incur lower rates than single people and older women. This means getting married can make your insurance rates more affordable.
Moreover, where you live also affects your insurance rates. Highly populated neighborhoods with a lot of cars mean you are more likely to be at risk of theft, accidents, and collision; thus the rates will be higher. Also, your credit score, as well as your profession, will affect your premiums since they show your creditworthiness and likelihood of being involved in an accident.
3. Your driving habits
Have you been in an accident, received a ticket, or made an auto insurance claim before? If your driving history is awful, some insurance companies can deny you insurance or give you one at a very high rate. Fortunately, over time these blemishes usually become less important.