Many key factors determine your comprehensive car insurance rates, including your driving record, credit score, location, age, gender, vehicle type, mileage, and claims history. A clean record and good credit score generally result in lower premiums. High-risk drivers pay more for coverage. Understanding the major rating factors allows you to compare rates and make informed choices when purchasing auto insurance.
Driving Record
Your driving record is one of the most critical factors that auto insurance companies examine when determining your rates. It provides insurers with insights into your driving habits and risk profile as a policyholder.
Traffic Violations
Insurers closely evaluate your history of traffic violations like:
Speeding
Reckless driving
Failure to stop
Running red lights
DUIs
Drivers with multiple violations are seen as higher risk and have to pay more for car insurance coverage. For example:
A single speeding ticket can increase rates by 15-30%
Just one DUI can nearly double annual premiums
Violation |
Rate Increase |
|---|---|
Clean Record |
0% |
1 Speeding Ticket |
15-30% |
1 DUI |
95% |
2+ DUIs |
150-200%+ |
Keeping a clean driving record for 3-5 years can help lower those surcharges.
At-Fault Accidents
Having an at-fault accident on your record also raises insurance rates substantially. Premiums normally increase after a single at-fault crash by 25-45%. The more accidents you have, the higher your rates climb.
1 At-Fault Crash: +25-45%
2 At-Fault Crashes: +50-90%
3+ At-Fault Crashes: 100%+
Rates typically remain elevated for 3-5 years after an at-fault accident. The best way to lower your premiums is to maintain a safe, accident-free record over time.
Credit History
Your credit-based insurance score is another major factor that insurance companies use to set premiums. In most states, insurers look at your credit report to gauge financial responsibility.
How Credit Impacts Premiums
Drivers with good credit tend to file fewer claims
Poor credit correlates to irresponsibility in insurers' eyes
Bad credit = higher perceived risk = higher rates
Here's how credit scores impact average annual premiums:
Credit Rating |
Average Premium |
|---|---|
Excellent (800+) |
$1015 |
Good (680-799) |
$1252 |
Fair (620-679) |
$1562 |
Poor (500-619) |
$1895 |
*Data source: The Zebra 2022 analysis
As you can see, going from good to poor credit can almost double annual insurance costs.
Improving Your Score
If your credit is less than stellar, take steps to improve it before your next policy renewal. Things that help include:
Paying bills on time
Paying down balances
Disputing errors on your report
Limiting new credit applications
Insurance scoring models focus on real markers of financial responsibility. Improving your credit history can pay dividends in lower premiums.
State Exceptions
Be aware that California, Hawaii, Massachusetts, and Michigan have laws prohibiting the use of credit when pricing insurance policies. Your location determines if this factor applies.
Location
Where you live, park, and drive your vehicle has a significant influence on auto insurance rates. Insurance companies consider location-based risk factors when pricing policies.
Geographic Differences
Rates can vary dramatically between states, cities, and even ZIP codes. For example:
Michigan's average annual premium is $2,693
Maine's average is just $984
Population density is a key factor. Metro areas with more cars and drivers on the road tend to have higher premiums. Rural low-traffic areas often enjoy lower rates.
Costs are also higher in regions with:
More vandalism
Higher rate of accident claims
More expensive auto repairs
Higher medical costs
Urban regions typically see more crashes and claims, driving up everyone's rates.
Parking Location
Insurers consider your garaging address and where you park the vehicle regularly. Storing your car in:
An enclosed garage = lower risk
On-street parking = higher risk of weather damage, vandalism, and theft
Parking on high-risk city streets rather than a secure garage could cost 5-15% more in premiums.
Commute Distance
Mileage and distance driven regularly also impact premiums. A 10-mile commute is less risky than a 50-mile commute every day. High mileage drivers have more exposure on the road.
Let your insurance company know if your driving habits change, so they can reevaluate your rates accordingly. Location matters when pricing car insurance coverage.
Vehicle Type
The specific vehicle you drive is a key rating factor for auto insurers. Certain cars, trucks and SUVs are more expensive to insure than others.
Vehicle Attributes
Insurers evaluate:
Make and model
Age
Repair costs
Safety ratings
Anti-theft features
Newer cars generally cost more to insure due to higher replacement part costs. But new safety tech can lower premiums. Older cars are cheaper to insure, but lack modern safety systems.
Here are sample annual premiums by vehicle:
Vehicle |
Average Premium |
|---|---|
2021 Honda Civic |
$1,567 |
2021 Ford F-150 |
$1,632 |
2021 Toyota Camry |
$1,452 |
2015 Honda Civic |
$1,254 |
2015 Ford F-150 |
$1,185 |
*Rates assume 45-year old driver with good credit and clean record
Luxury cars, sports cars, and specialty trucks often have the highest insurance rates due to repair costs. Family sedans and minivans tend to be cheaper.
Anti-Theft Features
Investing in anti-theft upgrades like:
Alarm system
Tracking device
Immobilizer
VIN etching
Can earn you up to a 15% discount from insurers. Preventing theft lowers risk. Discuss options with your provider.
The right vehicle helps minimize insurance costs.
Age
Your age is a significant factor for auto insurance companies when evaluating risk and setting premiums. Rates fluctuate as you progress through different life stages.
Teen Drivers
Due to lack of experience, teen drivers pay the highest rates. Premiums typically peak around ages 16-19. Here are average full coverage costs for teen drivers:
Age |
Average Annual Premium |
|---|---|
16 |
$4,295 |
17 |
$3,974 |
18 |
$3,651 |
19 |
$3,494 |
*Rates assume teen driver with clean record
Adding a teen to your policy can easily double your family's auto insurance costs. Many parents simply can't afford premiums and delay licensing.
Young Adults
Rates start to decrease around age 20 and can drop 20% by 25. Becoming an adult driver pays dividends.
Age |
Average Annual Premium |
|---|---|
20 |
$3,077 |
21 |
$2,811 |
25 |
$2,399 |
*Rates assume one speeding ticket
Good student discounts help offset high costs for young drivers maintaining a B average.
Mature Drivers
Generally by the mid-30s, drivers tend to pay the lowest rates based on experience. But costs creep up again after age 70 due to higher claims risk. Defensive driving courses help counteract age-related increases.
No matter your age, comparison shopping is key to finding the best auto insurance rate.
Gender
In most states, gender plays a role in auto insurance rates. According to insurance data:
Male drivers under 25 tend to have more accidents
Men receive more traffic violations than women
Thus, young men generally pay higher premiums
However, some states like California prohibit the use of gender as an insurance rating factor. Rates in those areas are gender-neutral.
But for most of the country, being a young male driver equates to higher car insurance costs.
Claims History
Your prior claims with your current insurer and previous auto insurance providers heavily influences premiums. Too many claims signal higher risk.
At-Fault Claims
At-fault accidents where you caused the damage are major red flags for insurers. Just one at-fault claim can increase your rates by 25-45% per year. Multiple at-fault accidents within a few years can nearly double your costs.
It's critical to avoid excessive at-fault claims if you want to keep rates affordable. Here's how at-fault claims impact premiums:
At-Fault Claims |
Average Annual Premium Increase |
|---|---|
0 |
0% |
1 |
+25-45% |
2 |
+50-90% |
3+ |
+100% or more |
Rates typically stay elevated for 3-5 years after an at-fault claim before decreasing.
Comprehensive Claims
Filing comprehensive claims for damage from vandalism, weather, or animals generally has a lesser impact on premiums than at-fault accidents. But multiple comprehensive claims can still increase your costs up to 10-20%.
Insurers may opt not to renew your policy if you file too many claims of any type within a short period. Avoid excessive claims to keep rates affordable.
No-Fault Accidents
The good news is that accidents where you are not at fault generally don't impact your rates. No-fault and uninsured motorist claims don't penalize good drivers. However, stay vigilant about avoiding any preventable incidents.
Your overall claims history sets expectations on future costs for insurance providers.
Mileage
How much you drive your vehicle annually directly correlates to your risk exposure on the road. The more miles driven, the more likely you are to be involved in an accident. For that reason, mileage is another key rating factor for auto insurers.
Commute Distance
Insurers look at your daily commute distance, as longer distances equal more time on the road. For example:
10 mile daily commute = lower premium
50 mile daily commute = higher premium
Cutting your commute distance, whenever possible, can help lower insurance rates.
Annual Mileage
Companies also consider total miles driven each year. Low annual mileage (5,000-10,000 miles) suggests less risk, while high annual mileage (15,000+ miles) indicates higher exposure.
Annual Mileage |
Average Premium |
|---|---|
5,000 miles |
$1,250 |
10,000 miles |
$1,350 |
15,000 miles |
$1,512 |
20,000+ miles |
$1,715 |
*Rates assume 35-year old driver with full coverage
The variance in premiums based on mileage is clear. Reduce driving distances to save.
Occasional Usage
For cars driven infrequently, specialty insurers offer affordable leisure-use or pleasure-use insurance. These policies reflect lower risk for vehicles not used for daily transportation.
Keeping mileage within reason helps control insurance costs. But don't sacrifice safety just to save money.
Coverage Level
The amount of insurance coverage you choose directly impacts premium costs. Higher limits equal a higher premium. But skimping on coverage is risky.
Minimum vs. Full
At a minimum, you need liability insurance meeting your state's requirements. This covers damage and injuries you cause others in an accident.
However, experts recommend also getting:
Collision (pays to repair your car after an accident)
Comprehensive (pays for damage from weather, theft etc.)
This combination is called full coverage. It protects your vehicle as well as others.
Coverage Type |
Average Premium |
|---|---|
Minimum Liability |
$567 |
Full Coverage |
$1,249 |
*Rates assume 35-year old driver with clean record
Going above minimums increases costs, but provides critical protections.
Policy Limits
Liability insurance coverage levels are shown as three numbers:
$100,000/$300,000/$100,000
$100k per person injured
$300k per accident
$100k property damage
Higher numbers mean more protection. Increasing limits raises premiums, but could save you from massive liability payouts after a serious accident. Discus options with your insurance agent.
Extra Coverages
Additional options like rental reimbursement, roadside assistance, and rideshare coverage also increase premiums. But they provide benefits that may be worth the cost.
Evaluate your risks, assets, and budget to choose optimal coverage for your needs.
Marital Status
Marriage offers many financial benefits, including potentially lower car insurance rates. Insurers consider marital status when evaluating risk.
Married drivers tend to be more cautious and file fewer claims
Data shows married couples have fewer accidents
Thus, they present less risk to insurance companies
As a result, most auto insurers offer a discount for married applicants. Average savings are:
5-15% discount for married couples
10-20% discount when bundling two policies
The key is consistency. Recently divorced drivers may lose their married discount until they legally re-establish single status.
For unmarried couples living together, consider getting a domestic partnership affidavit from your DMV to qualify for the same discounts as married policyholders.
Overall, marriage provides some advantages when shopping for auto insurance coverage. But safe driving habits are most critical for securing low rates.
Other readers were also interested in the following posts:
Is Full Coverage Car Insurance Worth It?
Comprehensive Car Insurance: What It Is and What It covers
Why Comprehensive Car Insurance is Best?
How does comprehensive coverage differ from liability coverage or collision coverage?
Real-life scenarios where comprehensive coverage would be necessary or beneficial
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