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What Affects Car Insurance Rates?

What Affects Car Insurance Rates? 

Did you know that there are over 6 million car accidents in the U.S. each year? Every time you leave your driveway, you’re at risk for a collision. This is why many states require car insurance by law. In addition to accident coverage, auto insurance can also protect your vehicle in the event of a fire, flood, or theft. Though it may not seem like it, vehicle insurance is a small investment compared to the price of a car crash, natural disaster, or burglary. But just how small is that investment? That depends. The following factors influence the rate of your car insurance premium: 

Policy and deductibles

Auto insurance isn’t one-size-fits all. When you open a new policy, you’ll make selections about what you want covered and the deductible you’re comfortable with. The greater the coverage and lower the deductible, the higher the premium will be.

Age and Gender

Your insurance rate is mostly based on risk assessments and statistics. Age and gender fall into that category. Though it’s illegal to discriminate by gender in most states, some areas do take it onto account. Since young females are less likely to get into accidents, they often pay 15% less than their male counterparts. By age 30, gender rates typically even out.

Teens and divers under the age of 25 usually endure the higher rates. This is due to their lack of experience and high impulsivity. Premiums also start to increase for seniors over 65. Statistically speaking, people in this age bracket are more likely to cause accidents and suffer injuries.


Each state has different laws and minimums when it comes to car insurance. Your specific zip code could also influence your premium. Areas with high crime and accident rates will result in more expensive premiums. This is because your insurance provider views your case as higher risk. 

Vehicle Type

Your car’s make and model will probably affect your auto insurance. Cars with superior safety ratings or low repair costs are eligible for discounts. Luxury vehicles and sport cars typically produce higher premiums because they are costly to fix. Also, certain cars are statistically more likely to be stolen. For this reason, they will be more expensive to insure.

Driving Record

The better your record, the lower your premium. Safe drivers typically pay 40% less than those with a poor record. Traffic violations and accidents can raise rates 20%-200% depending on the severity and whether or not you have past convictions. Even if an accident isn’t your fault, simply filing a claim can raise your rate. If you have a poor record or no record at all, you could face a high premium for 3-5 years. Once you reach the 3 year mark, it’s worth it to shop around for a new rate. Some providers are more forgiving than others.


The more you’re on the road, the more likely you are to have an accident. For this reason, cars with a greater annual mileage will see higher rates. If you have a short commute or only use your car for leisure, you will pay less for your auto insurance.

Credit Score

California, Massachusetts, and Hawaii do not weigh your credit score against your car insurance premium. However, if you live in one of the other 47 states, you’re out of luck. Since a bad credit score signifies irresponsible behavior, it can make you seem like a liability. 

Marital Status

Oddly enough, married drivers experience 50% fewer accidents than unmarried people. If you’re recently married, be sure to update your policy. You may see a reduction in your rate.

Find the Most Cost-Effective Car Insurance Policy With Nickerson 

When an insurance provider generates a vehicle insurance premium, they look at your coverage needs and risk factors. If you don’t understand why your auto insurance is so expensive, let the agents at Nickerson Insurance Service, Inc. take a look. We will assess your requirements and risks to determine the most cost-effective option for you. Contact us today for a free auto insurance quote.

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