Factors That Affect Your Auto Insurance Rate
Rating Territory
Rates are higher in geographic areas where accident rates, number of claims filed, and average cost of claims paid are higher. Rates reflect auto repair costs, hospital and medical expenses, jury awards, and theft and vandalism in the area. Even someone with a perfect driving record will be charged the going rate for the area where the automobile is garaged.
Use Of The Automobile
Drive less, pay less! Low annual miles translate into a smaller probability of being in an accident, so you pay lower rates. Rates are also lower if the insured automobile isn’t usually driven to work or is driven less than 3 miles one way. Premiums rise slightly if you drive more than 3 but fewer than 15 miles to work and increase if your commute exceeds 15 miles each way.
Personal Characteristics Of The Driver
The persons age, sex, and marital status can also affect automobile insurance premiums. Insurance companies base the premium differentials on the number of accidents involving certain age groups. For example, drivers aged 25 and under make up about 15 percent of the total driving population but are involved in nearly 30 percent of auto accidents, and 26 percent of all fatal accidents.
Male drivers are involved in a larger percentage of fatal crashes, so unmarried males age 29 or under, and married males under age 25, pay higher premiums than older individuals do. Females over age 24, and married females of any age, are exempt from the youthful operator classification and pay lower premiums.
Type Of Automobile
Insurance companies charge higher rates for automobiles classified as intermediate-performance, high-performance, and sports vehicles, and for rear-engine models. Some states even rate four-door cars differently from two-door models. If you’re thinking of buying, say, a Corvette or a Porsche, be prepared for higher insurance rates.
Driving Record
The driving records, traffic violations and accidents of those insured and the people who live with them affect premium levels. More severe traffic convictions such as driving under the influence, leaving the scene of an accident, homicide or assault arising from the use of a motor vehicle, and driving with a revoked or suspended driver’s license result in higher insurance premiums.