September 27, 2022


When shopping around for car insurance, you might be tempted to speak to your potential insurance carrier about the type of discounts available.  It’s only natural that you want to figure out how to get the best insurance premiums possible.

What many people don’t realize is that your premiums are affected by more than just the possible discounts that you can qualify for. Insurance companies will take into consideration a whole bunch of factors to determine the rate that’s applicable to you.

Generally speaking, your insurer will first calculate your risk of getting into an incident or the risk of the vehicle being stolen, and then proceed to work out a premium. Consumers are all different, but many factors are common and insurers will use the following to determine your specific insurance premiums:

1. Your Age

Insurance companies believe experience comes with age. The older you are, the more time you’ve spent behind the wheel. According to statistics, drivers over the age of 20 are 3 times less likely to be involved in an accident than teenagers. Only once you reach the age of 25 will there be a reduction in your premiums…if you have a good driving record, of course. Naturally, the older you are, the more chance you have of enjoying lower premiums. Drivers over the age of 50 usually enjoy the cheapest insurance rates around.

2. Your Driving Record

Insurance companies will refer to your driving record by accessing your driving record. Factors that will count against you include accidents, speeding tickets, and other infractions. If you have a clean driving record, insurers are more likely to offer you favorable rates. Be sure to request your C.L.U.E report and check that there are no mistakes on it.  You can request it from LexisNexis® Any mistakes should be corrected as soon as possible.

3.Your Gender & Marital Status

According to statistics, males are more likely to be involved in an accident compared to their counterparts. Women generally qualify for lower rates if they have a clean driving record, among other factors.  Over time, this difference will decrease and eventually, both sexes will be looked at in the same light. However, married couples are also less likely to be involved in a car accident, so being married could also serve to lower your car insurance.

4. Your Location

Where you live will also be considered by your potential insurance carrier. If you live in the city you are more likely to pay a higher premiums. Urban areas with densely packed traffic come with a higher possibility of accidents, theft, and other risks associated with driving in the big city. On the other hand, living in rural areas will be less risk for insurers, and you will be more likely to pay lower rates. Where you park your vehicle will also influence these rates. Leaving in the safety of a garage at night will most probably lead to less risk and, therefore, lower premiums.

5. Your Yearly Mileage

The more time you spend on the road, the more chance you have of being involved in an accident. However, if you are only using your car to cover short distances every day, you might qualify for low-mileage discounts. Generally, if you are able to keep your annual mileage below 15,000 miles, it might be worth it to discuss your options with a potential insurance carrier.

6. Type of Vehicle You Drive

Before you buy a car, check with your potential insurance carrier how much the insurance will be for that particular model you are considering. Some cars are just more expensive to insure than others because, for example, they are more likely to be stolen, targeted by radar, higher repair costs, and other factors related to that specific vehicle. Should the vehicle be fitted with safety features such as airbags, car alarms, anti-lock brakes and more, rates could be reduced.

7. Gaps In Your Insurance Cover

Insurance carriers will assume that you are a higher risk if you show gaps in your insurance coverage.  It may not always be the case, but any gaps in your insurance, even short ones, could lead to higher premiums.

8. Claims record

Insurance companies will look at your previous claims reports to see the nature of your claims. If you were not at fault, it shouldn’t affect your premiums. However, at-fault claims will in all probability count against you. The number of claims you’ve made will also be scrutinized. Three claims in three years will also be deemed riskier to insure and you are more likely pay higher for your insurance.  In fact, some insurers might actually decline to insure you or renew your policy if you have too many claims.

Insurance Basics