Insurance factors essentially come down to three separate categories: Who you are, where you live, and what you drive. Here’s what you need to know:
Who You Are
A person’s driving history is the big thing here. If you have a perfect driving record, you can generally expect better rates than if you were going in with some baggage. Supposing someone has taken some defensive driving courses, for instance, that’s going to look a lot better to an insurer than a string of fender benders. But there’s more to it than just driving history. Other personal factors that insurers will consider include:
- Marital status
These are the big ones. A married woman in her thirties is going to get better rates than a single nineteen-year-old man. That tends to apply no matter where you’re buying insurance. Other factors may vary from insurer to insurer. Sometimes a college student will get to reap a generous discount for good grades, or they might cut you a break depending on your job. Gender, age, and marital status are pretty much universal, while the other factors come down to what discounts an insurer does or does not offer.
Where You Live
Insurers look at where you live so that they can figure out the likelihood of things like theft, burglary, and vandalism. In some neighborhoods, you’re just more likely to have your car stolen or broken into than in others. You can move to a different neighborhood to get a lower rate, but spending fifty percent more on rent to save five percent, or whatever the number may be, on insurance, isn’t exactly practical for most of us.
What You Drive
This one should be fairly obvious. An expensive car means bigger claims, meaning that with all other risk factors being equal, the insurer is going to have to write you a bigger check should something happen. Other factors that come into play here include:
- Safety features
- Vehicle size
- How new the car is
The irony is that the perfect car for insurance doesn’t really exist. Theoretically, you’ll spend less for a vehicle fully equipped with all the latest safety and anti-theft features, but then, you’ll have to spend more, because those features will make the car more expensive to repair or replace. In any event, as long as what you’re driving is something that is safe and up to code, the cost of insurance is a good reason to go with the slightly less expensive of two options when car-shopping.
Vehicle size comes into play because a larger vehicle comes with greater concerns for liability. Running into someone’s chain-link fence in a truck is going to do a lot more damage than running into it with a compact car, for instance.
The above-listed factors are not the only factors that matter when buying insurance, but they’re the factors that are more or less universal. Again, every insurer has their own discounts, their own ways of calculating risks, and will hand you a different quote. But, if you read the above-listed items without saying “Uh oh,” then you have a good chance at a great rate.