Factors that Affect Car Insurance Rates

You know the general rules affecting car insurance rates – the higher the risk, the more you would have to pay for coverage. There are many factors that affect insurance rates. Among them are the driver’s gender, distance covered per year and the purpose for which a vehicle is used, to mention a few.

Here’s a comprehensive list of factors that affect car insurance rates:


Generally statistics show that drivers aged 25 and below are at a higher risk of being involved in accidents. Drivers aged between 50 and 65 meet with the least number of accidents. The younger you are, the more you would have to pay.

Gender and Marital Status

Women are regarded as safe drivers and a married person will pay a lesser premium than a single person if all other records are identical.


Where you live is also a factor that affects insurance rates. Areas with low or no traffic will bring down insurance rates. Congested cities see more accidents and this means higher insurance rates. Areas with a high number vehicle thefts will also see an increase in insurance premium.

Traffic Violations

If your driving record carries traffic violations – speeding tickets, reckless driving, beating red lights or prosecution for accidents caused through your fault, be prepared to pay more for insurance coverage. Some companies would want to look at your driving record in the last five years. But then your premium will get lower if your record improves over the years.

Accident Claims

Have you made numerous accident claims in the past? The higher your claims, the higher your insurance premium will be. Claims will affect your premium for a minimum of 3 years.

Payment History

If you have poor payment history or if your policy was cancelled for non-payment at some time in the past, be prepared to see a higher premium.

Vehicle Type

If you drive a cheap car, you can expect to pay a lower rate than if you own a sport utility vehicle (SUV).

Credit Rating

You would have to pay a higher premium if you have a poor credit rating. So, try to improve your credit rating to bring down rates in the long term.


If you’re a salesman who spends more time on the road, you’ll end up paying a higher premium than if your work entails sitting at your desk all day.

Number of Drivers

If you have one car and four drivers will be using it, you’ll end up paying more than if you’re the only driver.

Others factors that would affect your insurance premium are:

• distance covered when driving to work

• distance covered annually

• your driving experience (number of years)

• whether vehicle is used for business purposes

• whether theft protection devices are installed (lower premium if so)

If you’re not satisfied with the premium quoted by an insurance company, be free to check out others. Different companies have different ways of assessing risks. Assessment is usually based on the experience of previous claims. What is high risk for one company may not necessarily be so for another.


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