Numerous factors influence your auto insurance premium.

Every company weighs factors differently using complex rating schemes that are proprietary and unknown to the consumer. There are however some factors that are frequently used that make for significant differences in premiums between auto insurance buyers. Here are some of those factors ranked in what I see as having a major versus less than major impact on auto insurance rates: MAJOR FACTORS:

• Credit History or more specifically - Insurance Score
• Your insurance score is closely related to your credit score. Improving this score can be one of the most influential factors to what you will pay for insurance going forward.
• States that do not allow the use of Insurance Scores: California, Hawaii, and Massachusetts.
• Claims History
• Claims frequency is more important than driving record. Most insurance companies have rating schemes that reward those who do not have claims. Read that to also include surcharge or remove discounts for those who do.
• Driving Record
• Driving record, specifically violations are less of a factor than they used to be. A poor driving record in combination with a poor insurance score and claims history is a recipe for very high insurance rates.
• Continuous Insurance Coverage
• Yep. Not maintaining proper insurance coverage can mean a big difference in what you pay for insurance.
• Garaging Location
• In some areas of the country, where a car is principally garaged can make a huge difference in your auto premium. An extreme example can be seen in the state of Michigan. The Insurance Information Institute reports the average cost of an auto insurance policy in Detroit is $10,723. The whole state of Michigan averages $1,131 for the same policy.

OTHER FACTORS:

• Age-Related
• Youthful Operators
• This can be a ‘major factor” if a driver is under the age of 25. The younger the driver, the more expensive rates will be. If the young person is deemed a “primary” operator, the increase in premium can be as much as 3-fold.
• Gender
• Gender has little impact on auto rates but for youthful operators. Boys pay more than girls especially during the teen years. Once an adult, gender has little influence on auto rates.
• Years of Driving Experience
• Years of driving experience impacts:
• Young drivers
• Drivers who first choose to drive
• International operators entering the country
• Most companies will add what is called an inexperienced driver surcharge to those with less than three (3) years driving experience in this country.
• Vehicle Make/Model/Submodel
• Data on every Make, Model and even Sub-Model of vehicles is collected and parsed to determine those cars that are safer, cost less to repair and have lower incidents of theft.
• These statistics impact auto insurance rates for all coverages in today’s rating schemes.
• Coverage Limits - Comprehensive & Collision Deductibles
• It may go without saying that the better your coverage, the more you will pay. That is true, but it may surprise you how little an extra “layer” of liability, uninsured motorist and personal injury protection will cost.
• However, there are significant differences between the minimum coverage limits required by law - and - those that reflect more responsibility.

Less Important Factors:

• Occupation
• A few companies will adjust rates based on higher risk occupations and discount rates slightly for less risky careers.
• Education
• There are some companies that will provide a break on premium based on your education level. Those levels may include; no high school, high school, some college, college degree, masters or PhD completion.
• Previous Liability Limits
• Yes. There are companies that will provide a better rate to those who have carried higher liability limits on their previous insurance contract.
• Marital Status
• Not a significant factor. With many companies not a factor at all.
• Vehicle Use
• Vehicle use was a big factor in auto rates for many decades but has taken a back seat to the other variables above.
• Miles driven annually
• Some companies still provide minor discounts for low mileage but fewer increase premiums because of long commutes. Not a major factor with many companies.

Those are some of the factors, major and otherwise, that influence your auto insurance premium.
If you are seeking sound strategies that you can employ to reduce your auto insurance focus on those that you can control. This information is key to making a difference in your rates going forward. Have more insurance questions? Stop in and see us anytime or give us a call at 607-324-7500. We LOVE to help!