You probably already know that auto insurance companies take several factors into account when determining rates. Personal information also plays a role in what your insurance premium will be because the company is trying to determine whether you fall in the “safe driver” category. For example, if you don’t drive your car very much because you work from home, your insurance rates may be much lower than the average commuter in your area.
Here are some other key pieces of personal information that insurance companies take into account when calculating your rate quote:
Older, mature, and more experienced drivers typically command lower insurance rates than teen drivers or first-time drivers. This is simply because the insurance company can take a close look at your driving record and verify that you are a reasonably responsible driver. However, a series of traffic violations in your recent driving history and a history of filing several claims over the course of the year can negate any benefits of being an older driver.
Your Credit Score
Many people wonder why their financial history would play a role in insurance rates. The reasoning behind this is that people who are responsible with their money may be more likely to be responsible about paying their insurance premiums on time, and even being responsible drivers. If you are in the process of submitting an insurance application, make sure you have a spotless credit report. Take the time to order a copy of your credit report so there aren’t any glaring mistakes or errors – a low credit score or problems in your credit history could bump up your insurance rates.
The area where you live also plays a role in determining your auto insurance rates. Some neighborhoods are simply safer than others – low crime rates and gated areas are a plus. Your insurance company will inquire about where you live and look up crime patterns in your neighborhood to determine whether your vehicle might be at risk of being stolen or vandalized. If you live in a gated community or park your car in a highly-secure garage, make sure the insurance company knows about it so they can adjust your rates accordingly.
If you have to drive your car to an unsafe neighborhood for work on a regular basis, or you are on the road for sales calls and other work-related activities, you can expect your insurance rates to be higher than the average. Your occupation may play a role in how much you end up paying for auto insurance and you need to be very specific about how often you drive your vehicle, and what your average mileage is per year.
DMV.org – Factors that Affect Insurance Rates
State Farm Insurance – What Affects Car Insurance Price?
One Money Design: What Affects Car Insurance?