What Affects the Cost of Auto Insurance?

By Jeannie Knudson

  • Overview

    Most people are looking for ways to cut costs and lower their bills and car insurance is no exception. Understanding what affects the cost of car insurance will help you negotiate a better rate when shopping for insurance and potentially lower the cost of your current auto insurance. Most states and insurance companies place similar values on what affects the cost of car insurance whether negative or positive.
  • Driving Record

    In most cases, your driving record has the most influence on the cost of car insurance. Accidents and tickets have negative affects on car insurance prices. Most car insurance companies assign points to each type of violation depending on the severity of the offense. These points are then calculated with a series of checks and minuses, ultimately deciding the car insurance rate they will assign you. The negative affects of moving violations and accidents are usually reduced or removed after one to five years of safe driving.
  • Safety Features

    Having safety features on your car can affect the cost of your car insurance. Anti-theft devices, particularly in newer vehicles, will often garner you a discount on your insurance. Having airbags installed in your vehicle can also affect insurance costs. Anti-theft devices, airbags and other safety features reduce claims against insurance companies, thereby reducing insurance rates and quotes.


  • Types

    The type and amount of vehicles on an insurance policy affect insurance costs. Insurance companies are businesses and as with most business they give discounts for multiple purchases, or in this case insuring multiple cars in a family. Newer cars and sports cars will usually have a higher insurance cost than older vehicles.
  • Driving Usage

    When getting new car insurance or renegotiating your current insurance, the insurance company will invariably ask what your car is used for and how far you travel on a regular basis. Generally, the farther you have to drive and where you drive on a daily basis can affect the cost of car insurance. Rural areas are considered less of a risk than driving in metropolitan areas.
  • Considerations

    No matter what state you live in, age and gender can make a difference on insurance costs. Younger drivers on your policy will raise insurance rates and quotes. Male teens in particular can negatively affect car insurance costs. Car insurance companies use risk assessment to determine a portion of your insurance rate and young drivers, particularly those under the age of 25 and male are statistically a higher risk for accidents and tickets than other demographics.
  • Lifestyle Considerations

    Employment and grades can affect insurance costs. Most car insurance companies offer discounts for military personal and some federal or government employees. In the case of teen drivers, getting good grades will help lower car insurance rates.
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