9 Things That Affect Your Auto Insurance Rate

A blog post from our friends at Leavitt Group

Driving is a skill that takes time to develop. Safe driving, on the other hand, is mostly a state of mind.

Insurance companies track many factors that correlate with safe driving and price their auto policies accordingly. Gender and age are two of the most important. Another element that carries significant weight is marital status.

Gender
Insurance companies are all about managing risk, and engaging in risky behavior is one key personality trait that men apparently exhibit more frequently than women. According to the nonprofit Population Reference Bureau, men statistically participate in activities—like smoking, gun use, hazardous occupations and risky driving—which lead to a higher death rate due to unnatural causes.

The acknowledged behavioral differences between men and women are most pronounced among adolescents and young adults. Research from the U.S. Department of Health & Human Services showed that young men are more likely than young women to engage in a wide assortment of risky behaviors. Here are some examples of the differences:
 

• Drug use—male: 29 percent, female: 26 percent

• Property destruction—male: 46 percent, female: 25 percent

• Carry a gun—male: 26 percent, female: 6 percent

• Steal something above $50—male: 19 percent, female: 10 percent

Age
It takes years of driving to develop the skills, awareness and prudence to be a truly safe driver. The U.S. Department of Transportation statistics show that young drivers, aged 16-19, are three times more likely to cause fatal crashes than more experienced drivers, aged 30-69. Naturally, the differences are even more pronounced for young male drivers.

Young people pay a premium for the privilege of driving—or maybe their parents do. A person is considered a “youthful driver” until age 25, which is generally when the penalty begins to level out.

Marital status
There’s considerable disagreement regarding why married drivers tend to be safer drivers. Some suggest that it’s because married people drive fewer miles or they tend to have more stable personalities. Maybe it’s as simple as being accountable to another person. Whatever the reason, being married will generally qualify you for a healthy discount on your car insurance.

That’s the upside of getting insurance as a married person. The difference is greatest for younger male drivers, who will see the biggest drop in premiums once the cake is cut and the bouquet is thrown.

The downside is that insurance companies will factor both spouses’ driving records—and credit histories—when creating a quote. If the person you marry has multiple accidents or citations, you may end up paying more. 

Other factors affecting your auto insurance rate
Age, gender and marital status are important considerations, but they’re not the only elements that get factored into your auto insurance rate. Here are others that may be considered:
 

• Driving record: Depending on the violation, a single speeding ticket can increase your auto insurance rate by more than 20 percent and a single accident claim of $2,000 can cause a driver’s rate to increase by over 40 percent.
   

• Credit score: Studies have shown that people with better credit scores also tend to be safer behind the wheel.
   

• Grade point average: Maintaining a 3.0 GPA or higher can result in a discount of up to 20 percent with most insurance companies. Students won’t get penalized for bad grades, but they also won’t qualify for the discounts.
   

• Education: Having a college degree may qualify you for additional discounts. While some view this as a penalty for those without higher education, statistics show that college graduates tend to be safer drivers.
   

• Occupation: People in certain occupations—especially high-stress jobs that involve lots of overtime and sleep deprivation—are at a higher risk for accidents.
   

• Vehicle: The age, size and safety features of your vehicle, along with the replacement cost if it’s totaled and how often vehicles of the same make and model are stolen—are all factors that determine your rate.

If you think you’re doomed to pay a hefty cost as a result of these categories, give Mountain America Insurance a call. We’ll help you get the best possible deal.