If you’ve ever compared insurance rates with a family member or friend, you may be paying very different amounts for similar coverage. There are many factors that affect auto insurance rates that can cause one person to pay two to three times more than another for the same plan. These factors range from personal characteristics to financial habits to vehicle characteristics, but they all have one thing in common: they are considered indicators of risk. Insurance companies believe that these factors are indicators of the likelihood that you will have an accident and the cost of the claim when you file it.

Main factors

  • Age: Drivers under the age of 25 are most likely to be involved in an accident, while more experienced drivers between the ages of 50 and 65 have the lowest risk.
  • Gender: statistically, women have fewer accidents than men. However, the difference between the sexes is not as great as before.
  • Vehicle details – Engine make, model, year and size affect your rates. Newer cars and faster, more powerful cars are considered a higher insurance risk. If you buy an SUV, you can expect to pay more in insurance for a V8 than for a V6.
  • Marital Status: A married person will pay less for car insurance than a single person.
  • Traffic Violations – The more traffic tickets you have on your driving record, the higher your rates.
  • Accident Claims – While a minor accident may not affect your insurance much, having a history of accidents, even if they are just fender crashes, can increase your premiums.
  • Geography: A person who lives in the city has a higher risk of having an accident or car stolen than someone who lives in a rural, less densely populated area.
  • Credit Score: This may seem irrelevant when calculating auto insurance, but insurers claim that there is a statistical relationship between having a good driving record and a good credit score. Drivers with bad credit are more likely to file claims and more expensive claims than those with good credit.

What You Can Do To Lower Your Rates

If you are having difficulty paying for your car insurance or just want to cut a percentage of your cost, there are steps you can take to lower your rates. Consider the following money saving tips:

  • Drive a less powerful and safer vehicle. Paying for insurance on a small 4 cylinder vehicle instead of a large SUV or sports car can save you a significant sum.
  • Take steps to improve your credit. Keeping track of your expenses and paying bills on time could improve your credit rating and lower your insurance premiums simultaneously.
  • Ask about the good student discount. Statistically, students with better grades also have better driving records. If you or someone covered by your insurance is a student, keeping those scores high can lower your coverage costs.
  • Drive safely. Taking fewer risks on the road reduces your chances of getting a traffic ticket and also reduces the risk of an accident. Maintaining a good driving record could result in lower rates.

Another great way to find affordable insurance is to shop around with different companies. You are not required to stay with an auto insurance provider. Today, there are companies out there to help you with the comparison process and help you find affordable coverage that meets your needs.