Find Out 6 Factors That Can Negatively Impact Your Auto Insurance Rates

This site is privately owned and is not associated with the government. It contains information to help you in your application process for senior assistance programs.

You probably expect that your driving history will play a role in the auto insurance rates you are offered, but you may not have realized that other factors, such as your gender, age and marital status can also play roles in how much you are charged for auto insurance. A recent insurance quotes study reported by Huffington Post revealed that auto insurance rates can fluctuate by over 50 percent due to factors like these. Note that rules for determining auto insurance rates are set at the state and not at the federal level. Therefore, some of the factors outlined below may play more or less of a role in determining your auto insurance rates, depending on the state in which the policy is sold. Furthermore, in some states, basing auto insurance rates on some of these factors is against the law altogether. Therefore, you should research carefully the criteria for determining auto insurance rates in your specific state. If you have the option of registering your vehicle in two different states, consider their respective rules for setting insurance rates to help you make your decision.

1. 1. AgeYounger drivers tend to pay more for auto insurance than older drivers, even seniors. The impact of age on auto insurance rates means 20-year-old drivers pay over 40 percent more than 25-year-old drivers for auto insurance. Rates then stabilize for middle-aged drivers before dropping another 18 percent for drivers aged 60, at which point they essentially bottom out. This means an elderly driver may pay 50 to 60 percent less for auto insurance than his or her 20-year-old grandchild. The impact of age on auto insurance rates can vary between states. For example, in Massachusetts, the difference is more significant, while in Hawaii, the difference is quite small. The distinction depends on how much state law allows auto insurers to weigh a driver’s age when determining his or her auto insurance rate.
2. 2. Marital StatusMarried people tend to pay less for auto insurance than single people, if all other factors are comparable. However, these differences decrease as drivers get older. The difference in rates for married versus unmarried younger drivers is around 25-28 percent versus seven percent for married versus unmarried older drivers. According to researchers, the rationale for this difference is that marriage makes a person drive and behave in the world more carefully and responsibly. Insurers also bank on married drivers being more likely to bundle policies with homeowner’s insurance and life insurance than unmarried drivers, allowing companies to offer deeper discounts on those products.
3. 3. GenderStatistically, women are safer drivers than men. Therefore, women are less likely than men to file auto insurance claims and, as a result, pose less financial risk to auto insurers. The divergence in auto insurance rates due to gender decreases dramatically as drivers age, leveling off to nearly indistinguishable differences by the time drivers reach the senior citizen age range. There is also a prevailing exception to this general rule. Men between 30 and 50 years of age actually pay less in auto insurance rates than their female peers. In North Carolina, Massachusetts and Hawaii, it is against the law for insurers to offer different rates based on gender. Additionally, Pennsylvania, Montana and Michigan use the same criteria to gauge auto insurance rates for men and women alike, essentially subverting any potential gender related divergence in rates.
4. 4. Your CarThe type of car you drive can significantly impact the rate you pay for auto insurance. According to the Insurance Information Institute, typically, insurance premiums are determined by the vehicle’s sticker price and calculated with its overall safety rating and how likely it is to be stolen. A used car will typically cost less than a new car to insure, while a sports car will typically cost more to insure than a more practical vehicle. In this instance, the likelihood of your vehicle being stolen is every bit as much a consideration for insurers as the likelihood of it being involved in an accident.
5. 5. Your Driver ProfileYour own personal motor vehicle ticket and accident history are also factors in calculating your auto insurance rate, as are the number of miles you drive every year. The less frequently you drive, the less likely you are to get into an accident and file a claim. Additionally, if your driving record is free of moving violations and accidents, the less of a risk you pose for filing a claim with the company.
6. 6. GeographyThe areas where you will be driving and parking your vehicle play significant roles in how much an insurer may charge you for auto insurance on your vehicle. For example, if you live in a high crime rate area where vehicle thefts are common, you will likely pay more for auto insurance than someone else who lives and works in a safer area. The rates of traffic accidents, traffic related lawsuits and the costs for car repair and medical care in a particular area are additional geographic factors that influence auto insurance rates. The type of job you hold can also influence your auto insurance rates, depending on how much driving you must do to commute and complete job-related tasks.