Top Factors That Influence Auto Insurance Rates

Auto insurance rates aren’t arbitrary or mysterious. Insurance companies base those rates on the probability that we will file a claim and cost the insurer more than we’ve paid in premiums. Certain factors have been shown to indicate more risk for the insurance company, and more risk means we pay more for car insurance. Insurers generally agree on what these factors are, though they weight them differently.

Geographical Location

If you live in a highly populated or urban area, your rates will be higher due to higher risk of vandalism, theft, and crashes. Also, costs such as medical care and car repair, weather trends, frequency and cost of litigation, and the prevalence of auto insurance fraud vary from area to area.

Age & Driving Experience

The Insurance Institute for Highway Safety (IIHS) found that drivers ages 30 to 69 have less crashes. Young and senior drivers are more likely to be involved in an accident – new driving skills combined with high levels of distraction mean more risk for the young driver, and declining vision, motor skills, and reflexes cause accidents among elderly drivers.

Gender

Statistics show that males are more likely to crash, especially young and elderly male drivers. The IIHS found that men typically drive more miles than women and are more prone to risky behavior like speeding or not wearing a seat belt. Because of this, rates will differ between the genders during those younger and older years.

Annual mileage

The more you drive, the more risk you have of an accident.

Use of Vehicle

A vehicle used to commute each day to school or work provides more risk than a car you only drive on special occasions. Also, a car used for business purposes is often driven more and may require additional coverage.

Driving Record

High risk behavior like speeding tickets, previous accidents for which you were at fault, and DUIs, raise red flags to the insurance company that you may cost them money down the road. As a result, insurance companies offer better rates and discounts to drivers with clean records.

Vehicle Type

We drive different cars differently.  If your vehicle model has been shown to be involved in more accidents or more filed claims, your rates will be higher. Also, the cost to replace a new car is much higher than an old car, so they generally come with higher rates.

How Can I Lower My Rates?

You can’t control your age or gender, and we don’t recommend you get married to lower your insurance premiums, but several factors are under your control:

  • Drive defensively – There’s a reason insurance companies offer discounts for these courses. Statistically, safe driving will help you avoid an accident and lower the risk for the insurer.
  • Build a good credit score – It may not seem fair to link your financial well-being to your auto insurance rates, but most states, including Florida, support the use of insurance credit scores to determine insurance premiums.
  • Purchase a vehicle with lower insurance rates – In general, newer vehicles, sports vehicles, and cars with low safety and reliability scores tend to come with higher premiums.

Seek out a trusted insurance provider, like Corkhill Insurance Agency, LLC. We will shop our markets and tailor your auto insurance coverage to meet your needs. Call today for a free quote at 407-898-8891.