What Affects Your Car Insurance rate?

What Affects Your Car Insurance rate?

Car insurance is a necessary evil that helps you get back on your feet and go on your daily business if involved in an accident. Unfortunately, getting an insurance cover matching your budgets can be daunting and shopping around is the best way to get the best. Even so, you cannot shop when in the dark on the elements that can set you back a few bucks.

An important mantra to live by is this – the devil is in the details. If you are not cautious, that hot deal may turn to be the worst when you look at the little things that affect the total cost of your insurance cover.

Those somewhat little things that influence your car insurance include:

  1. Traffic tickets

Once a car insurance company determines your premiums, they will take a look at your driving history to look for indicators of risky driving. One of these indicators is traffic tickets. If your traffic records list some traffic violations and speeding tickets, then the insurance company will consider you a high-risk driver. Speeding tickets and other traffic violations point to increased chances of getting into accidents, and the cost of your insurance goes up automatically. Many tickets mean a higher insurance rate.

  1. Residence

Most traffic accidents happen around homes. This means that if your listed residence is in an over-populated neighborhood, with many cars, you will pay a more in insurance. The risk of getting into an accident increases with population.

Your residence also affects your insurance rate in relation to repair fees. Repairing cars cost more in some residential areas. At the same time, living in a high-crime neighborhood increases the total cost of your car insurance cover.

  1. Your financial situation

If you are in the low-income bracket and you own an old unfinanced car, you are in luck, and you will pay low monthly premiums. You will also benefit from high deductibles. However, if you are a high-income earner, you will part with more money in insurance premiums. The upside to being financially able is that you benefit from a higher insurance cover limit.

Your finances also determine the insurance company you’ll work with.

Credit score – a low credit score pushes your insurance premiums higher.

  1. Age

Young drivers pay more in insurance because of the notion that a young person is immature and reckless. Drivers below 25 years pay high insurance rates compared to drivers above 25 and those between 30 and 69 years. There could be some truth in this notion because the highest numbers of traffic offenders are young. Therefore, if you are looking to get your first car and are under25 or even 30 years, be ready for a hefty car insurance bill.

  1. Marital status

The main reason why most people fake their marital status when applying for insurance is that you pay less when married. Married couples get involved in fewer accidents, and they pay less for car insurance. The opposite is true – ticking the single checkbox will make your bill bigger.

  1. The safety rating and features of your car

If your car has a high safety rating, you will have a lower insurance rating. A high insurance rating means that you may not have to pay a lot for yours and your passengers’ medical bills in case of an accident. A car with low safety features and rating attracts a higher insurance rate. Safety rating features include air bags, automatic seat belts, or traction control.

  1. Age of your car

An older car gets ‘totaled’ in the case of an accident, and as the owner of one, you may opt to buy a new one in the event of an accident. But, a new car doesn’t get ‘totaled’ often meaning that you will pay a higher insurance premium for the new car. A new car comes with a high collision coverage rate compared to the old one hence the higher premiums.

  1. Size of the car

A smaller car isn’t as stable as a larger car, and it attracts a higher insurance rate. Therefore, buying bigger car guarantees a higher safety rating and lower insurance rates. On the flipside, a bigger engine translates to a higher interest rate.

  1. Annual mileage

The less you drive, the lower your risk of getting into an accident hence low insurance rates.

  1. Gender

Male drivers get higher insurance rates especially if single compared to female drivers. Thanks to the aggressive driving style of men, the risk of crashing is higher and in most states, gender counts when determining insurance rates. Hawaii, Michigan, Montana, Massachusetts, North Carolina, and Pennsylvania do not allow gender to affect car insurance rates.

  1. Claims record

Besides the driving history, which may have some incorrect details, insurance companies also look at records of claimed made in the past. Even if you haven’t been under their cover for a long time, they can verify your information with previous car insurers. In the case of not-at-fault collision and comprehensive claims, your fault claims will not affect the insurance rating. However, fault-claims will result in a surcharge.

  1. Previous covers

If you didn’t have a lapse with your previous insurer, then you will have a continual car insurance history, and this gives you a better rate.


These are the factors that affect your insurance rate. Though you have no control over your gender or your age, you have all the control over all the other factors listed, you can find more on Myinsuranceguide.co.nz. Control what you can to pay low insurance rates for your car.