What Affects Car Insurance Rates?

Mary Bennett | February 13th, 2020

How much you pay for your car insurance isn’t always based on the default price of a plan. Auto insurance providers balance lots of factors when deciding the cost of your deductible and premium amounts before providing you with insurance. Let’s go over the main factors that affect car insurance rates so you know what to expect the next time you negotiate for new auto coverage.

There are three main categories of car insurance rate factors: personal or demographic, car-based, and personal factors.


These factors are primarily determined and considered based on who you are or what demographic groups you belong to.

Age and Gender

Your current age and gender can have a big impact on your car insurance rates based on statistical trends. For instance, young men statistically have the most accidents out of any other demographic, so if you are both young and a man, you’ll pay higher premiums than almost any other person applying for car insurance. Women typically pay a little less because statistically, women get into fewer car accidents than men.

Age also plays a factor, however. For instance, older men are, ironically, statistically slightly less likely to get into an accident and older women. Still, older people in general pay higher rates than middle-aged or mature people.

Married or Not

Whether you’re married affects your statistical demographic just like your age and gender. Married people get into fewer accidents, so being married will lower your car insurance rate. Being single will, conversely, result in a higher premium amount.

Living Location

Where you live plays a big role in your likelihood of getting into an accident. For instance, places with more cars usually have a higher incidence of car accidents. So living in a rural neighborhood will probably result in a lower insurance premium.

In addition, urban areas with high amounts of theft will often incur a higher insurance cost because the likelihood of your car being vandalized or stolen is much higher. Cities with high rates of car theft, like Detroit, are historically expensive in terms of auto insurance.

Credit Score

Your credit score, or your history with loading companies and banks, can also affect your insurance premium rate. Those with better credit scores will have better premiums while those with lower credit scores have higher insurance premiums.

Your Job/Profession

What you do for a living can also affect how much you'll pay for a premium. As an example, if your job requires you to be on the road constantly, you'll be statistically more likely to get into an accident and will face a higher premium. But if you work from home, or if your job requires you to be a more careful driver than average, you might get a lower premium than average as well.


These factors are based on the condition and type of vehicle you drive.

Vehicle Size

How large your vehicle is can determine the cost of your insurance coverage. As an example, larger cars are usually safer to drive for the occupants than smaller cars. As a result, larger vehicles often have lower premiums, especially in relation to personal injury coverage, then smaller cars. However, engine size also comes into the equation, with larger engines relative to the car body size coming along with higher insurance rates.

Safety Rating

Every car has an inherent safety rating based on the car’s design and any safety features that may be included on the part of the manufacturer. These are things like airbags, seatbelts, and the like. Higher safety ratings mean that there’s a lower chance that you are any passengers will be seriously injured in an accident, so you’ll face a lower premium. Low safety ratings usually result in a higher overall insurance cost, of course.

Car Age

Older cars are imagined to be more dangerous to drive inherently both due to overall stress on the car’s parts and components and the difficulty of getting repairs for classic or vintage cars. This may be associated with higher insurance costs. On the other hand, older cars are more likely to be totally lost or “totaled” after an accident.

This, ironically, often results in higher collision coverage rates for newer cars as opposed to older ones. New cars, it’s thought, are more likely to be repaired than thrown into the junkyard.

Driving Habits

Finally, your personal driving habits will be a major influence on your overall insurance rates and your premium costs.

Driving History

Your previous driving experience for the number of accidents you have or have not been involved in plays a big role in your overall premium rate. Those with better driving histories will get better rates while those who are in a lot of accidents will see higher car insurance costs across the board.

If you have been in a number of accidents or issues, however, don’t think that you’ll be relegated to high insurance premiums for the rest of your life. Prior accidents eventually fade away and no longer affects your driving insurance rate. For instance, any noninjury accidents stop affecting your insurance rate after three years while injury accidents stop affecting your rate after five years.

However, you should always avoid getting a DUI ticket, as this can affect your premium for 10 years or more. Other insurance companies might not even cover you if you’ve ever had a DUI ticket.

Activity on the Road

Some auto insurance companies change your rate based on what you use your car for and how often you drive. For instance, cars that see a lot of wear and tear, like business commuters or delivery drivers, will often see higher insurance rates than those who only drive for recreation or who only drive for short distances.


All in all, there are lots of factors that can affect your car insurance rate, so it’s no surprise that you may get quoted different prices from different insurance providers as you shop around for the best. Keep all your factors in mind and use them to narrow down which provider will be right for you.


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