Auto Insurance Rates – What Determines Them?

Working for an insurance company in Coeur D’Alene, I learned a lot about the factors that affect the cost of auto insurance. Insurance companies consider the fact that numbers don’t lie when deciding how much to insure a person.

These are the factors that can affect your insurance premiums.

Your driving record is the first thing to consider. While a single speeding ticket won’t affect your insurance rates, multiple tickets or other infractions over the course of a year will. Certain tickets are more serious than others. If you are caught running a red lights or failing to stop at a stop sign, your rates could skyrocket. These tickets can make you appear extremely high-risk on paper.

Your auto insurance rates will also be determined by the type of vehicle that you drive. Your costs will rise if your vehicle is older. Even if the vehicle is new, some vehicles are high-risk due to their high theft rate. Passenger cars will be less expensive than those in sports utility vehicles. It will be difficult to obtain insurance for sports cars such as Mustangs and Corvettes. Insurance companies understand that these cars are not intended to be driven at the speed limit.

The third factor that determines how much auto insurance costs is the person’s age. Your monthly premium will increase the younger you are. Rates will not drop until you turn 25. Even then, they will remain high. Insurance companies are more likely to insure young drivers because they pose a high risk. Younger drivers are often inexperienced and prone to making mistakes. They are responsible for a large number of accidents and many of these can be prevented.

Fourth, statistics prove that married couples are safer on the roads. These people are considered more vulnerable than those who are not married. These people have a family, a house, children, and a job. They don’t want to take any chances, even if it means driving as safely as possible. Statistics show that people who are not married have less to lose, and take more risks with their lives (not just auto insurance, but in general).

The fifth factor that determines how much an individual pays for automobile insurance is his location. People who live in large cities will pay more than those who live in smaller towns or in the country. Inclement weather places have higher accident rates that those in milder climates. This makes sense. It makes sense. If it snows in Idaho, you have a greater chance of getting in an accident and skidding than someone who lives in an area that does not get snow. A person who lives in a large urban area has a greater chance of being involved in an accident, as he will be driving around with more people every day. These areas are considered high-risk in the US.

Insurance companies employ large numbers of statistic analysts and risk assessors to spot trends and do market research. They collect a lot of data to determine which population segment is at high risk and which is not.

The numbers don’t lie, and your auto insurance rates are based on those numbers, regardless of where you live in Coeur d’Alene or another part of Idaho. Knowing why your current rates are so high will help you reduce them in the future. There are some things that you cannot control, such as your age, marital status, and location. However, there are other items you can control, such as tickets and vehicle type.