What Determines Auto Insurance Rates

Auto insurance rates can be expensive, and no matter how much you hate it, most states now require minimum amounts of liability coverage to be carried on your vehicle at all times. Drivers in the United States paid an average of $1,566 per year for their premiums, but many factors decide the amount that you will pay for your coverage. Here are a few of the things car insurance companies use to determine your premiums.

Your age, where you live, type of vehicle you drive, and even gender can all affect your car insurance premiums. Those who are aged 25 and under will see significantly higher rates than those over the age. It is also reported males pay twice as much to insure their vehicles than females. And, the city you live in also has a major impact on car insurance premiums. People in Northeast states, including New Jersey, New York, and Washington, D.C., pay double the amounts for car insurance. The type of vehicle you are driving also factors in on your premium’s. High theft vehicles cost more to insure. Those included in high theft vehicles are the Honda model cars, Cadillac Escalade, and GMC Yukon.

Other factors that can affect your premium are more in your control. Take your driving record for example. Car insurance companies use your driving record as a major decision for your premium’s. If your driving record is bad, expect to pay more for your insurance. By obeying all traffic laws and being a safe driver can help ensure your record stays up to par and your premiums will be less. Credit score can also affect your rate. Lower credit scores mean higher car insurance rates. Pay your bills on time and check your credit report regularly to make sure their are no errors.

Occupation and education also determine car insurance rates. Those involved in high risk occupations will pay more to be insured. People who have college degrees pay less for their auto insurance. The more education you have, the less money you will be out for your car insurance. The miles you drive your car is factored in on your premiums, as is your past car insurance history. The less miles you drive your vehicle, the lower your rates will be. If you have had insurance and several lapses in the past, expect an increase in premium’s.