Auto insurance rates are something of a mystery to many people, with wide variations in price that seem to make little sense. To help you understand how insurers decide what to charge you for your policy, Brent Roark, Nationwide Insurance Agent in Grayson, KY, explains below what factors they consider when setting auto insurance rates.
Top Factors That Affect Your Auto Insurance Rates
1. Type of Car
The make, model, and year of your car are among the most important factors in determining your rate. A fancy, new car costs more to insure than a 20-year-old workhorse because the insurer is on the hook for a larger payout if you file a claim.
2. Your Personal Information
Your age, sex, and marital status all affect your rates, as auto insurance companies have found that young, single, male drivers file more claims than do females, married people, and people over age 25. Your address matters, as well. For instance, if you live in a high-crime neighborhood or on a hazardous stretch of road, you'll pay more than if you live in a safe, suburban cul-de-sac.
3. Your Driving History
Do you have a history of traffic violations or accidents? If so, you're paying more than you would if your driving record was clean. Insurers believe that past performance is the likeliest indicator of future results.
4. Driving Distance
Another important factor is the number of miles you drive each day or each year. The more time you spend on the road, the greater is your risk of having an accident.
5. Your Credit Rating
Finally, your credit rating has a surprising effect on your auto insurance rates. Insurers have apparently discovered that people with a record of late payments, charge-offs, loan defaults, collections, and other credit problems tend to file more claims and are thus a greater risk to insure.
Brent Roark, Nationwide Insurance Agent in Grayson, KY, will help you design an affordable auto insurance policy that includes all discounts for which you qualify. Visit the agency website to request an auto insurance quote, or call (606) 474-7818 to discuss your options with a friendly professional.