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What Impacts the Price of Car Insurance?

Posted July 01, 2021 in Auto Insurance

3 Minute Read: 

Most motorists know that car insurance is legally required to drive a car; however, auto insurance can be expensive, and the cost of your policy has many variables, some of which are out of your control.

Toy car sitting on top of papers and near coins and calculator

Let’s look at the factors that go into car insurance prices to ensure you are getting the best deal.

If you are looking to insure your vehicle, you may like to contact Gallant Risk & Insurance Services, Inc. We offer auto insurance with various protection options to give you peace of mind in the event of a road traffic accident, theft or breakdown. Contact us today by filling out our contact form or calling (951) 368-0700.

Which Factors Determine the Price of Car Insurance?

1. How Many Years Have You Been Driving, and How Does Your Driving Record Look?

One of the most important factors that determine your auto policy rates is your driving experience. This includes how many years you have been driving and your driving record. 

If you passed your driving test years ago and have been driving safely without incident (such as speeding tickets, DUIs or accidents), your car insurance will be lower than someone who has only recently started driving or someone with numerous violations.

The more you have on your driving record, the more you can expect your premium to be.

2. What’s Your Age?

Your age is a factor, and a significant one at that. There is no denying that teenagers are more expensive to insure than someone in their 30s or 40s with a lot of experience to show — especially if they have a clean driving record.

If you are looking to insure your teenagers, it’s wise to look to see if there are any discounts available. Some insurance providers offer good student discounts.

3. What Kind of Car Do You Drive?

The type of car you drive influences your policy cost. If you drive a luxury sports car that’s worth more, you will have to pay more for its insurance.

In addition, those with luxury or classic cars often consider additional insurance protection for their vehicle.

4. How Much Do You Drive?

Your car’s mileage is used to determine your insurance price. The mileage not only helps determine the age of your car (and the likelihood of it experiencing a problem), it also describes the type of driving you do.

If you commute long distances, you will likely pay more than someone who drives around town for “pleasure.”

5. What State Do You Live In?

Different states have different requirements, and an identical policy may fluctuate greatly between neighboring states.

6. What’s Your Zip Code?

The location of your home will also be taken into account when determining the cost of your car insurance. If you live in a city, you’ll pay more than those in rural areas. This is because cars in cities are more likely to be vandalized, broken into or stolen. 

Whether you have a garage or leave your vehicle on the street may also affect the price of car insurance.

7. What’s Your Credit Look Like?

While your credit can get overlooked when determining what goes into your auto insurance premiums, it is a significant factor. Your insurance provider will run a credit history and examine your credit score. 

The higher your score, the better you are in terms of policy cost.

This is no longer the case in California under Prop 103; however, it is still relevant in other states.

Are There Other Factors?

Most insurance companies also take other variables into account, including how likely your car is to be stolen, its engine size, reliability and the cost of repairs. 

Vehicles that have been designed with high-quality safety features and equipment may qualify for car insurance discounts. Additionally, high-end cars with cameras and sensors, like Tesla, or those using aluminum or composite materials are more expensive as well. 

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