8 Factors That Influence Car Insurance Premiums

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. Vehicle Type – insurers will consider vehicle cost, cost of repairs, theft rates, accident rates and safety test data.
7. 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.
8. Discounts - ask your insurance agent for applicable discounts. There are many.