How Car Type Affects Rates
There are four main factors that determine the base cost of insurance for the make and model of a vehicle type.
Value: How much the car is worth and whether the car is a base model or luxury model.
Engine size: Cars with larger engines indicate a driver who wants to drive fast. That sends a risk signal to insurance companies.
Repair costs: Some cars, even ones with modest price tags, are more expensive to repair. They may have specialized auto parts that aren’t easily replaced or unique features that require car mechanics with specialized knowledge.
Theft rate: Some cars are very popular amongst car thieves, while other cars are hardly touched. For this reason, cars with higher theft rates tend to be more expensive than cars with lower theft rates.
Other Factors That Affect Car Insurance Quotes
What your car insurance cost boils down to is how big a risk you pose to the company. In other words, how likely are you to be the cause of a costly insurance claim payout. Insurance companies avoid payouts, as these are losses. To reduce losses, they collect higher premiums from drivers who pose a higher risk.
But car insurance companies look at more than the cost of your vehicle to determine risk. They also consider a driver’s:
Demographics: Drivers under 25 tend to pay the highest premiums. Costs begin to decline after 25, steadily decreasing until drivers reach their 70s or 80s. Women tend to pay less than men, but in some states, companies are forbidden from using gender as a rating factor.
Driving record: People with clean driving records pay much less than those who have multiple infractions.
Marital status: Married people are considered lower-risk drivers than singles.
Credit history: People with good credit pay less than people with bad credit. People with excellent credit scores pay the least.
Coverage types: Whether you need liability coverage, full coverage, or additional coverage options.
State requirements: Some states require more insurance than others. Massachusetts, for example, requires several coverage options beyond liability insurance.
Location: Some areas have higher average costs for car insurance. Consider cost differences between cities and small towns in California.
Coverage limits: How much coverage you need for each type of coverage.
Deductible level: People with higher deductibles on their policies pay less than people with lower deductibles. Just be sure your deductible is set to a level you can afford in the event of a claim.
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