What Really Affects Your Car Insurance Rates – More Than Just Your Driving Record

Understanding the other factors that may play a role in the car insurance rates you pay will help you be a more informed consumer. The more you know going in the better off you will be in the long run. While some of the extraneous factors that affect car insurance rates are not in your control, others are, and understanding those other factors can save you a great deal of money.

Where You Live Impacts Your Insurance Rates

When you apply for car insurance, one of the questions on the form will be your address. Insurers need your name and address to contact you, but that is not the only reason. Your ZIP code actually plays a major role in determining your car insurance rates, since insurers compile regional and local statistics on everything from crime rates and auto theft to accident claims. It may not seem fair, but where you live can have a serious impact on your car insurance rates.

Many people assume that those in larger cities always pay higher rates for their auto insurance, and while urban rates do tend to be higher, those in very rural areas may face higher rates as well. Rural residents tend to rack up a lot more mileage, and that can cause car insurance rates to be higher. So while you may not be able to control where you live, you can be aware that geography will likely play a role in your car insurance premiums.

Where You Keep Your Car

If your car sleeps in a garage at night, your premiums can be substantially lower than if you have to park along the street. The reason for this disparity should be quite obvious – many car thefts are crimes of opportunity, and it is much easier to swipe a car sitting by the curb than to break into a locked garage. If you do have access to a garage, or even a carport, be sure to tell the agent when he or she is calculating your policy.

Auto Theft Rates in Your Area

If there have been a lot of car thefts or break-ins in your area, don’t be surprised to see those crime statistics reflected in your next car insurance bill. Automobile insurers are always compiling statistics about property crime and car theft, and if they see a spike in a particular area, drivers in those areas are often hit with higher premiums when renewal time rolls around.

Your Level of Education Can Impact Your Rates

While at first blush it may seem that your college experience has nothing to do with your ability to drive a car, actuarial studies have shown a relationship between educational level and accident claims. So whether it is fair or not, many car insurers provide discounts for drivers who are college graduates, while forcing non-college graduates to foot the extra costs. If your own education ended with high school, it may be worthwhile to seek out a company that does not factor educational background into their premium rate decisions.

What You Do for a Living

The type of job you have can also have an impact on your auto insurance premiums. This is also the result of actuarial studies that found a relationship between certain job categories and accident rates. While changing jobs for the sake of a lower premium is probably not in the cards, it does pay to be aware of the potential impact your job can have on your rates.

Your Credit Score

Your credit score is important for more than just loans and home mortgages. Many car insurance companies pull a copy of an individual’s credit score and credit report when that individual applies for car insurance. If your own credit history is less than stellar, you may want to seek out a company that bases its premium decisions solely on how well you drive your car.