What Influences Auto Insurance Rates

Insurance rates are tailored to the individual insured and can vary drastically from one individual to the next. Even individuals in the same household may obtain distinctly different rates. Some factors that influence the opportunity to achieve the lowest auto insurance rates include residential area, driving record, driving distance, vehicle type, theft protection devices, education, and even lifestyle and credit rating. While you have no control over your age or your gender, these two factors greatly impact the insurance rate you receive.

The Age Misconception

There is a misconception that turning 25 automatically reduces one’s insurance rates but twenty five is not a magic discount number for insurers. The truth is auto insurance companies reward experience and not necessarily age. An individual, who on his 23rd birthday has a clean six-year driving record, will receive lower auto insurance ratesthan the individual who is 25 but has been driving for only two years. Insurers base their rates on assumed risks. The assumption is that the more experienced driver will have fewer accidents and therefore poses a lower risk for the insurer.

Gender Rates

Debate regarding which gender is the better driver has been ongoing for many years. Believe what you will about the driving skills of each gender, but statistics show that men are cited more often for traffic violations and women are involved in fewer auto accidents. Furthermore, when women are involved in auto accidents, the rate of damage is less costly than when men are involved. Because of these and other statistics supporting the thought that women pose a lower auto insurance risk, the lowest auto insurance rates are offered to women.

Summary

Regardless to one’s age, gender or any of the factors that influence rates, the lowest auto insurance rate for your situation will be heavily influenced by diligent comparison shopping. To obtain the best rate, research auto insurance companies in your area. Remember that insurers want your business and will tailor a package to suit you.

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