You may have wondered what factors that affect car insurance rates. Here’s some information to help you find out: average annual car insurance costs by state, differences in rates by make and model, and the impact of a bad driving record. You’ll feel more confident negotiating your rates with your insurance agent. Until then, enjoy reading!
Factors that affect car insurance rates
The location of your vehicle is the most important factor in determining the cost of your insurance. Cities with high crime rates also tend to have higher insurance rates. Your location can have a big impact on the premium you pay. Age also affects auto insurance rates. People in their late twenties and thirties are usually the cheapest to insure. As they get older, premiums can be significantly higher. Also, your credit score can affect your ability to get a mortgage or car loan. Which makes your insurance rates more expensive.
Another factor that affects your rate is your vehicle’s safety record. Sports cars have high insurance rates because they are high-risk. Speeding drivers can result in bigger claims, so sports car insurance companies tend to charge higher premiums for them. Insurance companies take into account the cost of repairs and the possibility of damage to other cars. If your car is popular with car thieves, it is likely to be damaged more often than the average car.
Average annual cost of car insurance by state
When comparing car insurance costs, keep in mind that the average cost of the same policy can vary greatly depending on your location. The riskier your neighborhood, the higher your premiums will be. For example, urban areas have more cars and therefore, more accidents and claims. Listed below are the factors that can influence the cost of car insurance in different states.
In addition to factors affecting the overall cost of car insurance, the percentage of uninsured drivers will also affect your rates. Insurance companies pass these costs on to insured drivers. In states with high rates of uninsured drivers, average car insurance costs will be higher than elsewhere in the country. Drivers in Florida pay approximately $2,072 per year for the minimum coverage, which is 164% higher than the national average. Insurance companies recommend that drivers in Florida get the minimum coverage because lower coverage limits are less expensive.
In addition to the factors that can affect car insurance prices, the most expensive state is Louisiana. With a premium of $2,986 per year, this state ranks above other states in the country. Meanwhile, the least expensive state, Maine, has the lowest premiums for full coverage auto insurance. It is worth noting that Louisiana is 53.4% more expensive than its neighbor to the south. Despite the differences, both Maine and New Hampshire are still among the top five cheapest states. Despite their hefty premiums, Wisconsin and Idaho moved into third and fourth place, respectively.
Variation in rates by make and model
Variation in car insurance rates by make and/or model is a common occurrence. This is because cars with more horsepower will cost more to insure. Conversely, minivans are less expensive to insure than sports cars. Models with advanced safety features will cost more to repair if involved in an accident. Hence, insurance companies charge higher premiums for these cars. However, this variation is relatively small.
To calculate the premium variance, Bankrate uses data provided by Quaternary Information Services. From this, we can estimate how much it will cost to insure each make and model of car. These factors will affect insurance costs more than average premiums.
Another factor affecting the rate is location. While your neighbor’s rates may be the same, your rates will be different than yours. If you finance your car, you may need to purchase full coverage auto insurance. If you have a poor driving record or a low credit score, you should expect a higher rate.
Impact of driving record
If you’re shopping for car insurance, your driving record can play an important role in the final premium you pay. While there is no single reason for your driving record to affect your premium, it can have a big impact on how high or low you pay. A few years ago, you might have been involved in a minor accident and found no fault, but today, your insurance company is more likely to hold that ticket against you. Moreover, if you are in an accident, your insurance company will be less likely to renew your policy.
While insurance companies don’t publish their point systems publicly, most do keep track of your driving history. Uses it to set premiums. Traffic violations and tickets will earn you points on your license, which are then reflected in your insurance rates. If you have too many tickets, you will have to pay more premium.
Effect of location
The area you live in can affect your car insurance rates in two different ways. First, it can affect the severity of auto accidents and the cost of property damage. In California, for example, insurance rates can be nine times higher in large cities than in rural areas. Different states have different levels of crime and big cities are more prone to accidents. Then there’s the weather—big cities are subject to wildfires and earthquakes. While rural areas are less crowded and less likely to experience such calamities.
Finally, auto insurance is regulated differently in different states. For example, in Maine, the average full-coverage policy can cost less than $1200, while in Michigan it can be over seven thousand. These differences can be caused by the fact that insurance companies consider some areas to be more dangerous than others, whether due to weather or high crime rates. Even these factors cannot fully explain why insurance rates are higher in some areas than others.
Another factor that influences auto insurance rates is your car. Garage access is less likely in a residential neighborhood than in a downtown loft. Hence, insurance carriers may offer coverage at lower rates if you park your car in a garage. Therefore, it is important to understand how the climate of the area affects your car insurance costs.