Factors that Affect Car Insurance Rate
 by: Nemelou Despuez

Auto insurance, which is important for drivers and car owners to help them pay the damages in case of an accident, is a legal requirement on all states, or at the very least, strongly recommends people to have this coverage.

According to auto insurance companies, the rate or premium of coverage will depend on several factors including:

• Age of the policy holder. Younger drivers, specifically teenagers, have higher premiums because they are more likely to encounter accidents and are more reckless drivers than adults.

• Gender. Statistics show that women are safer drivers than men. According to road safety experts however, the trend is slowly changing.

• The place where the policy holder lives. People who are living in congested cities have higher insurance rates than those who are living in suburban or less populated places.

• Marital status. Several studies suggested that married people, especially those with children, are more cautious drivers compared to singles.

• Car’s value. The more expensive the car is, the higher the premiums for the policy holder.

• Multiple cars. Many insurance companies give discounts for people who have insured their other cars to the same provider.

• The purpose of the vehicle. Insurance companies require higher premiums for vehicles used for commercial purposes such as delivering, touring customers, and transporting goods.

• Driving history. A good record means that a person is less likely to encounter accidents, thus, insurance companies require lower rates.

• Education. Usually, people with better education are offered with lower premiums.

• Credit rating. According to insurance lawyers, companies charge people with a higher premium if they have poor or no credit history.

• Auto theft protection devices and safety equipment. If drivers will install such devices, the premium (especially for the theft coverage) will be greatly reduced.

• Occupation. Several studies suggested that certain professions have a greater chance to be involved in a car accident. For instance, a delivery driver has a higher risk to accidents compared to a computer specialist who sits all day on his office.

• The total miles driven annually. People who often use their cars are more likely to encounter traffic accidents compared to those who rarely travel.

• Distance traveled from the house to work.

• Years of driving experience. People who have an extensive driving history with clean records (no traffic tickets and violations) will have lower insurance premium.

• Impressive school grades for teenage drivers. Some insurance companies provide discounts for teenage drivers who have good grades in their schools.

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