Factors That Influence Auto Insurance Premiums

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• Gender: Males generally pay more than females. This is because male drivers, as a group, are involved in more accidents than female drivers.

• Age: Your age can also place you in a more expensive grouping. Drivers younger than 25 years old tend to have more accidents than drivers over 25 years old. As a result, a 17-year-old single male may pay 3 times as much for insurance as a 30-year-old single male. Some companies offer lower rates to those between 50 to 65 years old, since this group has lower accident rates. After age 65 rates may begin rising again, and individuals over age 70 may have difficulty finding an insurer to accept them as a new customer. When they do, the insurance can be expensive.

• Marital status:

Statistics show that, as a group, married drivers have fewer accidents than single drivers. Therefore, married drivers usually pay lower premiums.

Even if your age, gender and marital status do not put you in a group paying lower premiums, you may have other characteristics that qualify you for reduced insurance premiums.

• Driving record: Your driving record will play a crucial role in determining your premiums. Extensive studies show that drivers who are at-fault in an auto accident in the past 3 years are more likely to have another accident than drivers who have not had an at-fault accident. Similar data applies to moving traffic violations. Because of this, individuals with at-fault accidents or traffic convictions on their records pay more for their insurance — usually for 3 years following an incident.

  How much more these individuals pay depends on the frequency of their accidents or convictions and the type of conviction. An accident in which you were at-fault will weigh more heavily against you than a minor traffic violation. You can expect a poor driving record to greatly increase the price of insurance.

  Some individuals with poor driving records have a difficult time finding insurance at any price. For them, there are state-regulated insurance plans — sometimes called “assigned risk plans.” These individuals cannot select the company that writes their insurance. Instead, the state insurance plan assigns the “risk” to an insurer.

  These plans guarantee that all drivers can buy the minimum amounts of insurance required by their states. The resulting coverages may sometimes be less than what is needed for full coverage. Once their driving records improve, individuals in this category should be able to get standard coverage.

  If you have not owned a vehicle for 3 years, some companies will rate you as if you have never driven before and may refuse to insure you. Be prepared to pay higher premiums initially and ask companies how long you have to be a policyholder before they will consider you experienced and lower your premiums.

  Note: Some states do not allow insurance companies to consider some of the above factors in determining auto insurance premiums.

There are many insurance companies that offer you the ability to conveniently and securely manage your insurance needs online. However, be cautious and make sure you trust the source.

• Type of vehicle: Vehicles, like drivers, are grouped by risk. Statistics show which vehicles tend to be involved in more accidents, to suffer more serious damage, to cost more to repair and to be stolen more frequently. These risk factors affect insurance rates. Choosing a vehicle with a poor record in these areas can more than double collision and comprehensive coverage premiums.

  Most companies charge more to insure high-performance vehicles and sports models due to the higher risk involved.

• Other factors: Anything that might influence the frequency and size of claims you make on your insurance policy may affect the price you pay for coverage. For example, the number of miles you drive affects your likelihood of having an auto accident and, therefore may influence your premiums.

  Rates are regulated on a state-by-state basis, so the way an insurance company sets rates in Florida will be different from the way it sets rates in California. Rates vary considerably from place to place. Those who live in a small town or suburb are less likely to have accidents than those living in a large city. Vehicle repair, medical care and legal services generally cost less in a small town. Insurance companies may take these things into consideration when setting rates. In many states, your insurance premiums will reflect not only your own age, gender and driving record, but also those of other licensed drivers in your household. If your spouse has a poor driving record, it is likely to mean higher insurance premiums for the family vehicle, even if your driving record is perfect.