Car Insurance Rate: 5 Surprising Factors That Affect It

There will always come a time, a time you can characterize as an ad hoc situation whereby even the best drivers behind the wheel may get involved in an accident. Irrespective of who was reckless enough to cause an accident, there will always be damage to the car, which will call for their repair cost. This is why car insurance exists.

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The cost of repairing a car involved in an accident can be covered by several insurance companies, so long as you are insured. Several insurance companies offer coverage to protect the insured driver’s wallet by saving them the money they would have used to repair their car. If the accident causes damages that cannot be repaired, they will cover the individual’s cost of replacing the vehicle.

You will be obligated to pay the sum of about $126 per month and $1,512 annually to benefit from a car insurance policy, especially during an ad hoc accident. However, this estimate comes from speculation because the cost of your premium and deductible may be influenced by various factors that range from age to the type of vehicle you drive. The variation of individual formula insurance companies will use to calculate your monthly cost of the premium.

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What Are the Factors That Influence Car Insurance Rate?

The factors that may influence and alter the rate of car insurance include the following, but they do not have a universal influence in all the states in the United States of America. These factors include:

– Age
– Gender
– Credit history
– The type of car you drive

The Individual's Gender

The alteration of the cost of car insurance premiums and deductibles may be unique in both genders because of the difference in the crash statistics of both genders. Car insurance providers usually offer a high price to young male drivers because of their crash statistics.

Most young male drivers are more susceptible to car accidents because they frequently break the rules of safe driving, such as texting while driving, breaking traffic laws, and driving under the influence of intoxicating substances like alcohol and drugs.

The increase in crash statistics of young men can be further proven by the studies and research from the Insurance Institute for Highway Safety that show that gender plays a significant role in crash statistics.

Traffic accidents caused by young men are triple that of young women. Hence, young women will get a lesser car insurance rate that may be two times lower than that which they will offer to young men. But this benefit of a lower rate will halt when females grow older and almost be at equilibrium with that of young men.

The Individual's Age

The individual’s age is one of the significant factors that will influence the cost of car insurance. Almost all states in the U.S factor this in their premium calculation that appears to be different between the young and the older drivers. They all charge high premiums for younger drivers than older ones primarily because of a significant difference in their experience level.

Insurance providers believe young drivers are more susceptible to car accidents due to avoidable distractions and irrational decisions they will make behind the wheel. The term “age” may be different in various states because some states such as Hawaii, California, and Massachusetts define age as years of experience rather than that which relates to the individual’s date of birth.

The lower your years of experience, the more susceptible you will be to accidents, which therefore increases your premiums. The increase in premiums due to younger age also leads to a rise in premiums for older adults (above fifty-five years of age) due to there loss of hearing and vision, which may make them susceptible to car accidents.


The individual’s location—that is, the state and city he resides in is another significant factor that may influence the overall premium calculation because prior to other pieces of information your insurance provider will need, they will request for your zip code.

The premium calculation for individuals depends on their zip code; this can be seen in the difference in the average cost of insurance for individuals in Ohio and Michigan. The insurance providers usually charge drivers in Ohio an average cost of about $77 per month, which is almost twice lesser than the $213 monthly insurance premium for drivers in Michigan.

The discrepancies of insurance premiums are not limited to the individual’s states and city but also depend on how rural or urban the individual’s community may be. Urban communities are exposed to vandalism and traffic accidents; this may cost you high premiums.

Rural communities are less populated than urban areas and may be less vulnerable to accidents. But the lack of easy accessibility to the police station when your car gets stolen, you may expect to pay a high premium.

Credit History

The credit history of an individual may influence the cost of insurance, and it mostly depends on your ability to secure a loan. If you have a low credit history, you will not be able to secure a loan, which will make your insurance provider offer you an all-or-nothing deal.

They will charge you more and expect you to pay for the twelve months’ premium charges before they will provide you with an extension of coverage, mostly because studies have shown that individuals with low credit history usually miss payments.

The Type of Car You Drive

There are several models of cars that differ in several factors such as cost of purchase & repair, features, and maintenance; hence the type of car you drive may cost you a high premium if the price of the purchase, repair, and maintenance are high. Furthermore, you may expect to pay a high premium if the theft rate of owning your car is high.


These factors that influence car insurance rate makes it close to impossible to give an accurate estimate of the premiums and deductibles you should expect from several insurance providers. Therefore, it is advisable to utilize the existence of competition in the market to analyze several quotes from different insurance companies, because the cost they offer for their services are transformative from one to another, and you may ultimately pay lesser than expected for your car insurance rate that suits your requirements.

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