As you shop around for auto insurance, you may wonder how companies determine rates. While there is no magical formula, most carriers look at several factors that will ultimately guide how much to charge for coverage. Here are a few of the most common aspects that insurance providers review.

What Concerns Affect Auto Insurance Rates

1. Driving Record

If you have a driving record free of traffic violations and accidents, it will work in your favor when shopping for auto insurance. Companies reward drivers who have safe driving records by providing lower premiums. Those with charges such as DUI/OVI and other significant offenses will pay more for coverage.

2. Vehicle Type

Certain vehicles cost more to insure based on their accident and claim data. Auto insurance providers check historical information using resources such as the Insurance Institute of Highway Safety (IIHS). For example, high-performance, speed-enhanced vehicles are more prone to be involved in accidents compared to mini-vans. Before buying a car or truck, check out the rating on the IIHS website.

3. Age

Based on historical industry data, auto insurance companies have found that younger, inexperienced drivers are more likely to be involved in accidents. The same is typically accurate for drivers over the age of 70. As a result, these groups will pay more coverage. Those in their 50s tend to spend less compared to all other age groups. 

4. Location

Where you live will also affect how much you pay for coverage. Specific zip codes may have higher reports of theft and vandalism, which will result in higher auto insurance rates to protect against these risks. Drivers who live in cities and more congested areas will typically pay more for coverage compared to those who reside in smaller, rural communities. More people and cars mean an increased chance of being involved in an accident.

Tim Bryan Insurance in Andalusia, AL, always strives to provide customized and affordable coverage to its clients. As an experienced State Farm® insurance agent, Tim will gladly take the time to listen to you without pushing products that don’t fit your unique needs. If you’re in the market for auto insurance, call Tim at (334) 222-1460.