Auto insurance quotes: what factors are taken into account?
This question is both simple and complicated. It’s easy to produce a listing of all the factors an insurer could take into account, but it’s difficult to say how each insurer places importance on any of the factors. For example, California has formally produced rules which prevent any local insurer from relying heavily on the zip code. It’s felt this may result in discriminatory pricing based on racial and other stereotypes. But such rules are not in force in other states which are free to impose higher premium rates simply because of your address. So the best we can do here is to give you the list and a brief commentary. It will be for you to find out what happens in your state.
1. The volume of traffic
If you live in a rural area with very little traffic, the auto insurance quotes will be lower than those for people living in urban areas with high volumes of traffic. Obviously, the more vehicles on the road, the greater the risk of an accident.
2. The make and model you drive
This is two factors rolled into one. The NHTSA produces a star rating for the design and safety performance of each make and model in crash and rollover testing. This information is matched against the claims experience of the insurance industry over the years. The second factor relates to the probability the vehicle will be stolen. This is a combination of the security systems fitted to the vehicle and the attractiveness of the vehicle to thieves.
3. Your driving record
Although this is important, it is only one factor because, no matter how skillful you are, an inattentive driver can hit you or you can be beaten by the weather or other circumstances outside your control. So the best insurers only consider your record when you pick up tickets or you are found to be at fault. Real-time data on your driving style can now be collected by pay-as-you-drive technology.
4. How far do you drive?
The more miles you drive, the greater the risk of an accident. So the insurer looks at how far you commute to work, whether you use your vehicle for business, and so on.
5. Your age and gender
Up to the age of 25 you are considered a high-risk driver. Once you pass the magic age barrier, auto insurance quotes should fall until your driving is affected by your physical health or age-related problems.
6. Other factors
Some psychological profiling links a lack of responsibility in life to poor driving performance. Good students who maintain at least a 3.0 GPA are responsible, people with poor credit scores are not. If you change jobs often or move house, if you have ever been declared bankrupt, whether there’s a gap in your driving history, whether you own or rent the vehicle, how long you have stayed with your current insurer, and so on.