There are numerous rating factors insurance companies use to determine what car insurance premiums they charge, some of which you can change and others, such as your age, you can do nothing about. If you're a new driver, for example, you'll likely have some of the highest car insurance premiums out there. The reason for this is simple. Statistically, new drivers have the most accidents and file the largest claims of any group. The good news is that your rates should reduce significantly when you reach nine years of experience.
While there are several rating factors over which you have no control, such as age or gender, there are many more over which you do have control. Here's a list of 8 common factors used by insurers to rate prospective policyholders:
- Age – as discussed above,
young, inexperienced drivers pose the highest risk to submitting claims
and are therefore charged the highest car insurance premiums. This applies
to drivers of all ages. Rates are also generally higher for drivers 70
years of age and older, as they have also been shown to have a higher risk
of being in car accidents.
- Gender – in most states, male
drivers pay higher rates than females because they're been shown to drive
more miles and drive more aggressively. Some states, however,
including North Carolina, don't allow car insurance companies to use
gender as a rating factor.
- Marital Status – statistics from the
National Institute of Health tell us that single drivers are twice as
likely to being in a vehicle accident as married folks. As a result,
premium costs for singles are typically higher.
- Location – claim rates in urban
areas are higher than in rural areas due to more traffic congestion, more
accidents and a higher likelihood of your car being vandalized or stolen.
- Driving Record – safe drivers earn a
lower premium and often qualify for a safe driver discount. If you have
accidents or moving violations on your record you'll pay higher rates
because your insurer considers you a higher risk.
- Vehicle Type – insurers will
consider vehicle cost, cost of repairs, theft rates, accident rates and
safety test data.
- Types of Coverage – adding options to
your liability coverage such as collision and comprehensive will raise
your premium rates. Choosing a higher deductible will lower rates.
- Discounts - ask your insurance
agent for applicable discounts. There are many.
