Car Insurance: Factors That Affect Car Insurance Rates In 2021

2. Your gender
In most states, insurers can charge different rates for male and female drivers. This often means rates for men are higher when they’re young, and rates for women are higher when they’re older. A handful of states won’t allow insurers to differentiate by gender.

3. Your marital status
Most large auto insurance companies have lower rates for married drivers than for those who are single, separated, divorced, or widowed.

4. Your education
Drivers with college degrees generally pay less for car insurance. Insurers say highly educated people tend to file fewer claims.

Car Insurance: Factors That Affect Car Insurance Rates In 2021

Where you live, what you do, and your finances
5. Your address
Location is one of the primary factors affecting car insurance rates. Average premiums vary dramatically by state because each state has different regulations.

6. Your job
Drivers with certain occupations pay higher rates because they’re more likely than others to file insurance claims, according to some insurers. But consumer advocates have challenged the use of occupation in setting car insurance rates.

7. Your credit history
Whether you pay your bills on time can be a huge factor affecting your car insurance rates. In many states, insurance companies use credit-based insurance scores, which are different from your regular insurance score, to set prices. Your regular credit score is typically a good indicator of your credit-based insurance score.

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8. Whether you own a home
Some companies give homeowners a price break on car insurance, even if they don’t buy homeowners coverage through the same insurer. Many offer discounts if you bundle multiple policies, such as homeowners and auto insurance, with the same company.

9. Your driving record
If you’ve had accidents, traffic tickets, or violations like a DUI, you’ll probably pay more for car insurance than a driver with a clean record.

10. How much you drive
Low-mileage drivers often get cheaper car insurance, because less time on the road means fewer opportunities for an accident. Low-mileage drivers may also save by choosing pay-per-mile insurance, which tracks how many miles they drive to set premiums.

11. Where you park your car
Keeping your car in a garage is less risky than parking it on the street, and your insurance rates may reflect this, according to the Insurance Information Institute.

12. Your years of driving experience
If you started driving at 23, you’ll probably pay more for car insurance at 25 than someone your age who’s been driving since 16. Your rates are likely to decline as you get more experience behind the wheel.

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13. Auto insurance claims you’ve made
When your insurance company pays an accident claim on your behalf, you may see higher rates at your next policy renewal. On average, drivers with a recent at-fault accident pay over 50% more for full coverage than those with a clean record.

14. Questions you’ve asked your insurance agent
Merely asking your insurance agent about a possible claim can affect your rates, even if you decide not to file. Such inquiries, especially if you tell the agent about damage, could be recorded in a database that many insurers use when evaluating risk. That might count against you when you shop for new insurance.

15. The type of car you drive
Your rates are based in part on the claims your insurer has seen from other people who drive the same model as the car you’re insuring. Sports cars often have high insurance rates, for example, in part because insurers are more likely to pay out large claims from speeding drivers. Insurance companies also consider factors like how much a vehicle will cost to repair, how popular it is with car thieves, and how much it’s likely to damage another car in an accident.

16. The trim level of your car
Vehicles with extra features like lane sensors, backup cameras, and high-end audio can cost more to repair — and therefore more to insure — than base models of the same vehicle. Moving to a higher trim level typically raises not just the price of the car but also the insurance premium.

17. The safety features of your car
Vehicles with a strong safety record and good safety equipment often qualify for discounts, the Insurance Information Institute says. On the other hand, some safety features can lead to higher premiums, because high-tech safety equipment can be expensive to repair or replace after an accident.

Car Insurance: Factors That Affect Car Insurance Rates In 2021

18. Whether you own, finance, or lease
Insuring a leased or financed car may cost more than coverage for one you own outright, simply because the lender may insist you buy more coverage types than you would have chosen. To protect their interests, lenders typically require collision and comprehensive coverage. They may also ask you to maintain a low deductible or to get gap insurance to pay the difference between the car’s value and the amount you owe on the lease or loan.

Car Insurance: Factors That Affect Car Insurance Rates In 2021

19. The insurance company you choose
You can make a huge difference in your car insurance rates by picking the cheapest insurer available in your area. We found average rates were more than twice as high for the priciest company compared with the cheapest insurer in each state for a 40-year-old good driver buying full coverage. And the cheapest company in one state can be the most expensive in another. That’s why it’s imperative to shop around and compare car insurance quotes to locate the best rates for you.

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20. Your previous insurance
If you’re switching from a nonstandard insurer, one that mainly covers high-risk drivers, you may pay more than a driver switching from a mainstream insurance company. Some large insurers charge higher rates to drivers who were previously covered by a nonstandard insurer,  If you’re upgrading from the minimum required coverage to a policy with higher liability limits, you may pay more for the same coverage than other customers.

21. Your insurance lapses
Failing to pay your car insurance bill or canceling your policy because you’re between vehicles can cost you. Coverage gaps can make you seem like a higher risk in the eyes of insurance companies, and they’ll often raise your rates in response — or even deny you coverage altogether. To avoid this, consider pausing or reducing your coverage if your current premium is unaffordable.

22. The coverage you choose
It’s no surprise that the more coverage you get, the more it will cost. We found that full coverage auto insurance costs more than twice as much, on average, as having the minimum required liability coverage only. A full-coverage policy includes collision and comprehensive coverage, which will pay to fix or replace your car if you collide with other vehicles, animals, or objects or if it’s stolen. Add-ons like new car replacement coverage can boost the price, but the benefits may be worth it to you.

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23. The deductible you choose
Your deductible on collision and comprehensive insurance is the amount the carrier subtracts from a claim. For example, if car repairs cost $3,000 and your deductible is $500, the insurer will pay $2,500. Your insurance premiums will be lower if you choose a higher deductible, like $1,000, but the payout will be lower if you have an accident. Deductibles don’t apply to liability claims.

24. Your loyalty to your insurance company
You might expect your car insurance company to reward your years of loyalty with discounts, and some do. But some insurers try to predict which customers are the least likely to switch insurers and squeeze more profit from them through rate increases.

25. The discounts you ask for
Don’t assume your insurance company automatically applies all the discounts for which you’re eligible. For example, your insurer won’t know your teen is getting good grades unless you provide proof and ask for a good student discount. Insurance companies have tons of discounts, and you may save money by reviewing them with your agent on a regular basis.

Source: Nerdwalle