8 Factors That Affect Car Insurance Rates

If you’re wondering what causes high car insurance rates, you aren’t alone. From state requirements to the age of the driver, here’s what goes into determining the cost of a car insurance policy.

8 Factors That Affect Car Insurance Rates

Whether you’re buying a new vehicle, adding a new driver to your policy or shopping around for the best rate, it helps to know what factors can affect your car insurance premium. Here are eight things that can raise car insurance rates. 

1. Where You Live and Park

Not only where you live, but also where you park, can be factored into the cost of insuring you and your vehicle. Location demographics — crime, theft and vandalism rates, population densities and weather patterns — can have a direct impact on determining your rate. There’s no need to move just to save a little on car insurance, but being aware of these factors can help you understand the cost of your coverage and why your car insurance might increase or decrease if you move.

2. What You Drive

When it comes to purchasing a new ride, there are hundreds of makes and models to choose from. You’ve probably given a lot of thought to the make and model, year, price tag and features, but did you know the type of vehicle you purchase can impact your premium and increase your rate? Some cars cost less to insure than others, depending on various factors.

• Make and Model: A sports car may sound exciting, but sportier cars — especially those known for their speed — often carry higher insurance rates. SUVs, too, may seem appealing because of their larger size, but premiums are often higher because of the damage these large-sized vehicles can cause. 
• Engine Size: Vehicles with bigger engines may drive up your premium because they have more horsepower. On average, a six- or eight-cylinder vehicle has a higher premium than a four-cylinder model. 
• Theft Rating: Insurance companies monitor vehicle theft rates. If your make or model has a higher chance of being stolen, your premium may be higher. 

3. How Much You Drive

When you apply for an auto policy, you’ll be asked how many miles you drive on average. How much you drive can affect your car insurance rate. This is because statistics show that the more you drive, the higher your chances of being in a car accident are. 

4. Your Driving Record

Your driving record is one of the most important factors that can impact your auto insurance premium. If you have a good driving record, you may pay less. A poor driving record, however, can cause high car insurance rates. 

Speeding tickets, for example, can increase the amount you pay. If your premium increased when you renewed your policy, that speeding ticket may have been the factor that caused your car insurance rate to increase.  

5. Purpose of Your Vehicle 

If you use your vehicle for business or have a longer commute, you’re likely on the road more often than the average driver. This can put you at a greater risk for an accident and increase your auto insurance premiums.

6. Your Deductible

The amount of your deductible can be adjusted based on your preference. Choosing the deductible amount that best fits your needs is important. Raising your deductible will lower your premium but will also you cost more out of pocket if you have a claim later. Get caught up on everything you need to know about deductibles to help you choose between lower and higher options.

7. Your Age 

Younger drivers are less experienced and often pay higher premiums. Our Young Driver Safety Program encourages safe practices behind the wheel; young drivers (age 25 or under) who complete our program and meet several basic eligibility requirements can earn a discount on their premium.

On the flip side, once an adult hits their mid-70s, they may see an increase in rates again. Seniors are expensive to cover because they statistically get into more accidents, have more severe injuries than their younger peers and require more expensive medical treatment after accident-related injuries.

8. Marital Status

With nearly 50% fewer accidents compared to all other drivers, married drivers are statistically the least risky group to insure, resulting in lower premiums. If your status changes from single to married, be sure to let your insurance agent know so you can reap the benefits of matrimony.

Ways to Save

Many factors that affect car insurance rates cannot be avoided, but we offer a variety of discounts to reward you for driving safely. Learn more about how your safe driving practices can save you money with Driveology^®: The Science of Safe Driving. If you haven’t reviewed your policy in the last year, now’s the time to schedule a SuperCheck^® with your Farm Bureau agent to be sure you have the right coverage and best rate.