What are the Main Factors Affecting Car Insurance Rates?

Car insurance is essential, but it can be very expensive. Some drivers have insurance rates lower than others. The premium rates depend on a number of factors, such as:

Auto Insurance Company

Some companies offer lower premium rates than others. Wisely selecting your insurance company is the most important factor.


Teenagers and other young drivers are charged higher premiums because they are considered high risk. This is due to no other reason, but their age. As you grow older, especially after 25, your insurance rate will go down because you will gain more experience, but when reaching an older age, the insurance premium rates start going up again. A student who lives away from home and has a good academic record may have lower premium rates. Nothing can be done to control the age factor, other than patience.


Your gender is also a significant influence on your insurance premium. Women generally have lower premium rates than men because they are considered safer and low risk drivers. Men are likely to be involved in accidents than women. Also, men are usually on road more than women. The more miles you cover the more chances of having an accident increase. Some companies measure distance traveled by the insured using odometer and global positioning systems.

Vehicle Type

The more expensive the car, the higher its insurance rate. This is because expensive cars have costly spare parts and they are more prone to theft. A cheaper and more reliable car has a comparatively lower premium rate than an expensive sports car.

Driving Record

This is one factor that you have complete control over. A ticket for any kind of traffic violation raises the rate of your insurance premium significantly. Insurance companies go through your past driving records meticulously. They also check if you have made any insurance claims in the past. Insurance companies also share drivers records, which means your new insurer will know about your history of claims and accidents from your previous insurance provider. Companies reward safe drivers with no traffic violations by reducing their policy premium.

Driver Training

If you have some driving training, or have been to a formal driving school, then the cost of insurance comes down.


The premium rate depends significantly on the type of coverage you take for your vehicle. Liability coverage is mandatory by law, but beyond that if you want coverage against theft, fire or vandalism, you need to shell out more money.


A higher deductible payment lowers the insurance premium rates because you come across as a safe and responsible driver willing to accept certain costs if you are found at fault in an accident.

Safety of Vehicle

This includes how safe is your car type and module in an accident. The chassis and build quality, number airbags, speed of airbag response are few indications of how your car copes with collisions. Safety devices such as burglar alarms that make your car more secure reduce the premium rates.

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