Auto Insurance - What Factors Affect Rates?

By: Academix Insurance 1 Follower

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Auto insurance companies use many factors when then calculate your premiums. Some of these factors are under your control, and some you are powerless to change. Learning about what these factors are can help you understand where your insurance premiums come from, and enable you to change some factors if necessary to save money. There are many small factors that alter insurance rates to a small degree, however listed below are the four main factors, that are a large influence on auto insurance.

Make and Model of vehicle

This factor, is the major factor that is under your control. The type of car you drive has a large influence on car insurance rates, and should be taken under consideration when you are buying a car and trying to save money on insurance (especially for that newly licensed teenager of yours!). It has been found that newer cars are more likely to get stolen, as well as cars with larger engines or sports cars are more likely to get traffic violations such as speeding tickets. Because of this, insurance for these types of cars is high. For a list on how cars are rated, visit Auto Insurance Knowledge. This list is supplied by the Insurance Bureau of Canada, and rates cars based on how the insurance companies see them.

  • Age of Driver

This factor plays a large role, as I'm sure many young drivers can tell you. Insurance companies spend lots of money on research which has shown that younger driver's get into more accidents then older drivers. Since these drivers get into more accident, they are a higher risk to insure, and generate a higher insurance premium. The golden age seems to be 25, as once you hit this age, your insurnace rates drop dramaitcally.

  • Driver History

This goes along with age of driver, in that your past driving record will influence your current insurance rates.. The longer you have been driving with a clean record (no insurance claims or tickets) the lower your insurance rates will be.

  • Location

Each state/province has different laws and regulations when it comes to auto insurance. If you live in an area with a higher crime rate, your car will more likely be be a victim of theft or vandalism. Because of this you will be more likely to make an insurance claim, thus making your insurance rate higher. Those are the main factors that affect your auto insurance rates. There are many other small factors such as gender, distance driven per year, ect. that also affect insurance to a smaller degree. For more information on these factors visit Auto Insurance Knowledge at



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