Factors that affect your insurance quote
Have you ever wondered how auto-insurance companies determine your quote? Or why do quotes vastly differ by insurance providers? One of the main factors has to do with how insurance companies determine your risk profile: the likelihood you will get into an accident. This is assessed though the personal information and history you are asked to provide. Although factors may vary by state and company, they generally include:
Age
Insurance companies can charge a higher premium for people who are 25 or younger as statistical studies have shown that they have a higher risk of being involved in an accident.
Marital status
Studies have shown that marital status is seen to be correlated with level of responsibility and likelihood of accident. Married couples are less likely to get involved in accidents and hence, are charged a lower premium.
Credit based insurance scores
In some states, insurance companies use your credit history to help determine your risk profile. A clean credit history usually lower insurance cost.
Type of coverage
Choosing only the required coverage will lower the insurance quote as you will be more unprotected and will be taking more risk. The more coverage you add, the higher the insurance quote.
Address
Insurance companies use your ZIP code and address to assess if you live in a neighbourhood that is considered dangerous or known for having a high number of auto thefts.
Occupation and education
Accidents have found to be correlated with certain job occupations or education levels. Insurance companies use this information to help determine your risk profile and if you can qualify for student discount rates
Coverage limit
The lower the coverage limit, the cheaper the insurance quote as you will be taking more risk.
Deductible limit
A car insurance deductible is the amount of money you have to pay toward repairs before your insurance covers the rest. Higher deductibles reduce insurance quote as you will be paying more of your own money before the coverage is applied.
Driving history and experience
Insurance companies can look at your driving history and experience as an indicator of how safely you drive
Annual mileage & usage
The more miles you drive, the more likely you are to get involved in an accident, hence the more expensive the insurance quote.
Type of car
Some models have higher or lower repair costs that can affect the insurance quote.
