The top 5 factors that impact your auto insurance rates
This blog post is one in a series that we worked on in partnership with our friends at Young Alfred (YA). Specifically, we wanted to know what exactly goes into your auto insurance rates, so we asked the YA team for their insights.
Auto insurance rates are determined by several different factors. Each insurer has its own guidelines, but common criteria that they review for each applicant include:
- Driving history
- Insurance history
- Age and gender
- Vehicle type
Let’s break down each of these factors in more detail, starting with your driving and insurance history.
Things like how many accidents or violations you’ve had do come into play, but they can only affect insurance rates for three years. (That said, insurers regularly look further back than that!). Providers are also interested in how many claims you may have made previously — and how much those paid.
Your credit history is fair game, too: drivers with bad or no credit history tend to have higher rates. But this also means that as your credit improves, you’ll be able to shop around for better rates.
One thing that comes up a lot is the role age plays in determining premiums. When it comes to auto insurance, age really is more than just a number, and it does affect your insurance. Typically, your rates should decrease every year from age 17 to age 64. But like the youngest drivers, those over 64 should also be aware that their rates will increase.
Your car itself can also affect your insurance premium. If you happen to own a Maserati, any repairs would be expensive, which would be reflected in your premium - but, critically, that would be weighed against any safety features that help protect the car. On the flip side, that beat-up jalopy that you bought might cost next to nothing to repair but also could be easily stolen.
Here’s something we didn’t know before talking to YA: auto insurance carriers use Insurance Service Office symbols to calculate the cost of comprehensive and collision rates for a specific vehicle. This information is pulled by entering a car’s full VIN number (which is why you need to provide your VIN when shopping around for insurance) and helps to ensure an accurate rate.
At the end of the day, there’s one overarching question that guides your rates: how much risk does this pose? And the higher the risk, the higher the monthly premium.
Now that you know a bit more about what goes into your auto insurance rates, we recommend that you set up your Marble account and link your auto policy to it. That way, you’ll be able to shop around for new rates in partnership with our friends at Young Alfred, all from within your secure digital wallet.