Question:
How Does a Car Insurance Company Determine My Rate?
Answer:
While you’d like to get cheap car insurance based on your good looks, unfortunately that’s not how it works. Car insurance companies use a variety of factors to determine how much you pay for your car insurance premium.
Each company varies their formula slightly, but you should see similar quotes from different companies (although shopping for a quote on CheaperCarInsurance.com will actually help you save several hundred dollars off your rate).
The components that most car insurance companies use to determine your rate are:
- Your driving history (do you have any accidents or traffic violations)
- Your year, make and model vehicle
- Your age and gender (yes, men tend to pay more for car insurance)
- Your credit history
- The coverage you choose
- Any discounts you are eligible for
There’s a growing uproar about car insurance companies using credit scores as a basis for car insurance quotes. The companies argue that the lower the credit score, the higher the risk a policyholder is of having a car accident. Drivers don’t like their financial status contributing to what they pay for car insurance.
Men are at a higher risk of car accidents, as are drivers between 16 and 20, so that group will pay more for insurance.
Your rate will also be determined based on the discounts you’re eligible for. These can include:
- Good driver discount
- Good student discount
- Anti lock brakes discount
- Anti theft device discount
- Low mileage discount
- Multi-car policy discount
- Multi-insurance policy discount (if you also carry homeowner’s and RV insurance, for example)
Go ahead and get multiple quotes on our site to see how your stats stack up with some of the top insurance companies in the country. You can compare different types of coverage to find the policy that fits your insurance needs and your budget.
