The 32 Factors
How Much will you pay for Auto Insurance?
1) Name of the primary insured: This information is used in determining the insurance score/ AKA your credit.
2) Driving record: Statistically more tickets equals more claims paid out.
3) The length of time at your current residence: The longer you have established yourself at a particular address, the better your insurance score typically is. This shows stability.
4) Garaging Zip code: This is the zip code that the vehicle is primarily kept at. Zip codes are an important factor in determining the rates due to the likeliness of an accident occurring, or possible comprehensive damage such as hail.
5) Date of Birth: Age of the driver is a huge factor in rating for an insurance policy. Youthful drivers (under 25 years old) are typically going to pay more for insurance than clients over 25. As a person gets older and more experience behind the wheel, rates will generally decrease. There is a time where as we get older that rates can start to increase, This is because our reaction time to hazards on the road is not as fast. Therefore, clients over the age of 60 may start to see their insurance rates increase.
6) Marital Status: There is a married discount. Statistically, married couples, especially with children, tend to drive more responsibly.
7) Gender: Male drivers statistically have more accidents at younger ages, whereas female drivers at older ages are accident prone. So, rates will adjust accordingly based on the statistical data.
Vehicle information factors:
8) Year of the Vehicle: Newer models tend to have more safety features which can help lower insurance costs.
9) Make of the vehicle: The manufacturer may have standard features that they place in all of their vehicle lines which can affect insurance cost.
10) Model of the vehicle: Sports cars, or high-performance cars are going to run higher on insurance costs than standard vehicles. Trucks and SUV’s with four wheel drive capability may also run slightly greater than those same cars that are two wheel drive.
Insurance coverage factors:
11) Limits of Liability: Liability is what helps protect other drivers from you. Each state determines their minimum liability requirements to be legal on the roads. Increasing your liability limit will typically increase your insurance cost, but you also have more coverage.
12) Comprehensive coverage: This is coverage that helps protect the vehicle in the event of a comprehensive claim such as hail, theft, fire, vandalism, animal, glass, etc.
13) Collision coverage: This is coverage that helps protect your vehicle in the event of an accident. Collision, paired with comprehensive coverage and liability, constitutes basic full-coverage.
14) Deductible: Your deductible is the portion of the damage to your vehicle that you are responsible for in the event of a claim. It is a teeter-totter effect: The higher your deductible, the lower your insurance cost, and vice versa.
15) Uninsured motorist bodily injury protection: This is coverage that helps protect you from other drivers who are at fault in the accident, but you find out they do not have an active insurance policy. This coverage helps provide at least the state minimum bodily injury per person and bodily injury per accident limits as set by your current state.
16) Uninsured motorist bodily injury protection: This is for clients who currently carry higher liability limits than are required by the state minimum. With this coverage, it will help increase the other “at fault’s” party liability limits to increase, but not to exceed your liability limits that you have set in place on your current policy.
17) Uninsured Motorist Property Damage protection: Again, this is coverage that will help protect the vehicle in the event you are struck by another driver, they do not have insurance, or they did a hit and run on you. This coverage typically has a deductible that is associated with it.
18) Roadside assistance: This is an optional coverage that can help mitigate the cost of roadside repair. This can include but is not limited to towing, flat tire, and lockout service.
19) Rental Car Reimbursement: This is an optional coverage that is available when full coverage has been purchased. It will help provide funds towards a rental car when your vehicle is in the shop due to a covered claim.
Other Discount Opportunities:
20) Email address: Most companies now offer a paperless discount. A verified email address is required to obtain these savings.
21) Homeowner: Owning your home, even if it is insured through a different insurance company, can provide a homeowners discount on your auto insurance policy.
22) Higher education: Most insurance carriers are providing discounts for clients who are currently pursuing, or have pursued education beyond high school diplomas. This includes current college students, Bachelors, Master, and Doctorate Degrees. Additionally, includes vocational and trade school studies.
25) Vehicle use: This includes pleasure use (low mileage), commute (back and forth to work) and farm use. Some companies determine this rating factor based on the annual mileage you put on the vehicle. Pleasure and farm use vehicles are going to be less expensive than commute use. This is because the vehicle is not on the road as often.
26) Proof of Prior Insurance: Having six months of continuous coverage just before the start of a new policy can provide a discount through many different carriers. In fact, this is typically one of the largest discounts a person can receive.
27) Pay in full discount: Paying your insurance policy in 6 months or even 12-month increments can provide additional savings. This will save on any billing fees in addition to the discounted rates most insurance carriers offer.
28) EFT discount: EFT (electronic funds transfer) is an automatic deduction for your monthly payments through a checking account, and sometimes even through a card each month.
29) Bundling Discount: Having other insurance policies bundled together such as a motorcycle, home, and auto insurance with the same carrier can provide additional discounts through each policy.
30) Advanced Quote discount: To maximize out this discount, if you quote your insurance once you receive your renewal notice out more than 14 days, some insurance companies will give an advanced quote discount. Insurance companies reward people for shopping early, and it helps to lock in your rates.
31) 3 Year Violation free: Moving violations such as speeding tickets, failure to use your turn signal, etc. will affect your insurance rates. Most insurance carriers offer an additional discount if all drivers rated on the insurance policy have three years with no moving violations.
32) 5 Year Accident-Free: Insurance carriers will offer additional savings if all rated drivers have been accident-free for the past five years. This includes both “At Fault” accidents and “Not at Fault” accidents.
“Why are my insurance rates so high?”
As insurance an agent we get this question all the time. When helping to answer that question this is where we start. There are other factors but these are the “big” ones. If you have a specific question not answered here please feel free to call us.
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Last Updated on July 5, 2021 by Katie Sopko