Understanding Car Insurance Rates
You know car insurance protects you in case you're involved in an accident. What can be harder to understand is how car insurance rates are calculated.
Insurance companies use a large amount of data to help determine the cost of car insurance, but simply put, the less risk you present, generally the lower your car insurance rates will be. Here are some risk factors that insurance companies consider:
Driver Age
Because drivers between the ages of 26 and 73 cause far fewer car accidents and claims, car insurance rates are lowest during these years.
Gender
Male drivers have a 77 percent higher risk of dying in a car accident than women.1 So gender is often a factor in determining car insurance rates.
Marital Status
A married person may pay less for car insurance than someone who is single because claim statistics indicate a lower number of car insurance claims for married policyholders.
Driving History
Maintaining a safe and clean driving record is a very good way to keep your car insurance rates low. Usually, moving violations and accidents substantially affect your premium and can continue to keep car insurance rates high for several years.
The Car You Drive
Cars with a high theft rate or that are expensive to repair often cost more to insure.
Vehicle Use
With every mile you drive, your exposure to an accident increases and can affect your insurance premium. For example, if you work in an office a couple miles from your home and drive there five days a week, you have much less risk than a sales person who drives hundreds or thousands of miles a week.
Where you live
Insurance companies look at local accident, theft and lawsuit trends, in addition to the cost of medical care and car repair.2 If you are living in an area where these expenses are high or claims are frequent, you may pay higher car insurance rates.
Fortunately, you can control many of the factors used to calculate your car insurance rate. Check out these tips to save money on car insurance, or talk to a Farm Bureau agent today about how to keep your car insurance rates low.
1 "Women Drivers? They're Safer than Men," http://www.msnbc.msn.com/id/16698153, visited September 4, 2009.
2 "What Determines the Price of My Policy?" http://www.iii.org/Articles/What-determines-the-price-of-my-policy.html, visited September 11, 2009.
