If you’ve ever compared auto insurance rates across insurance companies or compared hours against a friends you might be feeling like auto insurance quotes are randomly generated. In fact, there is a lot of science behind a auto insurance quote.
Auto insurance companies are businesses, which means they are in it to make money. The more cars they have to repair or replace and the more medical bills they have to pay, the less money that is in their pockets. Therefore, insurance companies prefer to have the safest drivers insured through their company.
Most people think of safe driving as not getting into an accident and nothing else. This isn’t good enough for an insurance company. They spend a lot of money conducting research to find out, according to statistics, which factors make a person a more risky driver. Better yet, they simply want factors that are correlated with risk – it doesn’t even need to be directly related!
All of this research and statistical data goes into a formula, which calculates your premium. Insurance companies conduct their own research, so everyone’s numbers will be slightly different. Insurance companies also weigh factors differently. This is why you see such dramatically different results across insurance companies and individuals.
Here are some of the most common factors insurance companies look at when determining your auto insurance quotes:
Driving record – this one is the most obvious. If you’ve gotten into multiple accidents or have received a few traffic tickets, you are considered a risky driver. Keeping your driving record clean and taking driver’s education classes can help prove you are a lower risk.
Your address – where you live and where you park your car can affect your rates. Highly populated areas have more people, which means a higher chance of getting into an accident, having your car stolen, or having your car vandalized. If your car is parked in a garage or has an alarm system you might be able to get a discount.
Miles driven per year – the more you’re on the road, the more chances you have of getting into a wreck. Insurance companies usually want to know how far you drive to work or school each day, and how many miles you put on your vehicle annually.
The type of car you drive – certain cars are statistically involved in more accidents and thefts than other cars. Driving a safe vehicle with the latest security features is a great way to save money on your auto insurance.
Age, sex, and martial status – people who are young, men, or single are statistically more risky than older, female, and married drivers.
As you can see there are a lot of things that go into auto insurance quotes. Some factors are under your control and others are not. Your best bet is to simply be a good driver and make safe choices. Anything you can do to prove you are low risk can help!
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