Top Ten Factors Affecting Auto Insurance Rates

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Tagged as	Auto Insurance , Auto Insurance Rates

Auto insurance deals with a lot of factors that need to be understood before insurance is purchased. Auto insurance rates revolve around those factors and get influenced by any kind of changes occurring in them. Those changes can be circumstantial, financial, location, occupation, track record or history of the purchaser etc.

Following are the top ten factors that affect auto insurance rates:

1. Assessing Driving Eligibility: Depending upon your driving track record, the insurance company determines that what rate to offer you. This rate is finalized after checking your past driving records. If your record is clean, you are more likely to be offered a Safe Driver Discount or vice versa.
   
   
2. Previous Insurance Claims: Your previous insurance claims affect your rate proposed by the insurance company. It might be lower when considering your previous non-at-fault-claims but higher for at-fault-claims.
   
   
3. Value of Vehicle: The value of your vehicle is a key factor in determining your auto insurance rate. The type of vehicle is also a major criterion. A sports car is considered lavishness and its insurance rate will be on the higher side as compared to a normal car.
   
   
4. Auto Insurance Coverage: Liability is what that makes you a legal insurance owner in your jurisdiction. Physical damage coverage results in steep increase in your auto insurance rate.
   
   
5. Personal Bio-data: Gender, age, marital status and number of drivers are analyzed here. Teens have higher rates than old people due to their potential carelessness. Rates for female teens are lesser than male teens. Married people rates are also lower as they are assumed as safe drivers.
   
   
6. Mileage: Here drive less; pay less concept is invoked on annual basis. Vehicles used for commercial purpose has a higher rate as compared to vehicles used only for pleasure.
   
   
7. Occupation Verses Risk: Your occupation has a significant effect on the auto insurance rates. Risk is directly proportional to the job you are doing.
   
   
8. Credit Credibility: Insurers have inducted credit score as a tool to determine the auto insurance rates. Statistically, people having good credit have an edge over people carrying bad credit in the rates they are offered.
   
   
9. Location: Your place of residence makes a deep impact on the auto insurance rates. Places that are more prone to accidents are more likely to get a higher rate.
   
   
10. Impact of Deductibles: Choosing appropriate deductibles are very important to get an economical auto insurance rate. Higher deductibles results in lower rates. So, always prefer to choose higher deductibles as much as your budget allows.
    
    

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