Last Updated: June 2020
Imagine you’re starting a new job fresh out of college and need to trade in your old faithful for a more reliable, efficient vehicle. Traveling on business trips will come with the territory, so this decision seems quite fitting.
Most of us can agree, though, that the process of purchasing a new car is not as simple as finding an ideal make and model and determining the best payment plan.
There’s another important aspect that cannot be avoided: sifting through miles and miles of car insurance quotes to find the best rate.
Not only do demographic factors, such as age and gender, affect the affordability of car insurance rates, but personal driving habits also impact how auto insurance providers measure a driver’s level of liability.
If you want to learn more about relevant factors affecting car insurance quotes, along with how to navigate the best car insurance plans available on the market, you’ve come to the right place.
Factors Affecting Car Insurance Quotes
Whether you consider yourself responsible behind the wheel or not, there are a variety of factors affecting auto insurance premiums. However, auto insurers take into account more than just baseline demographics or up-to-date driving statistics.
Vehicle safety features, along with a car’s age and size, can also noticeably impact insurance quotes.
These factors, among others, are outlined below so readers can gain a better understanding of how car insurance quotes are generated and why engaging in certain activities may prove detrimental in the long run.
Age & Gender
For many leading car insurance companies the following adage rings true: “The younger the driver, the higher the rates.” Doesn’t this phrase stereotype new drivers as inexperienced or irresponsible right off the bat, though?
While the answer to this question is “yes,” the reasoning stems from the fact that younger drivers typically engage in more reckless driving behaviors, such as texting and driving or not wearing a seatbelt, compared to older motorists.
Since young adult males statistically are involved in more car accidents than young adult females, this portion of the population often experiences higher car insurance premiums. However, senior drivers can demonstrate slower reaction times while driving due to stiff muscles or vision and hearing difficulties.
Insurance rates often drastically decrease as drivers age. For example, insurance premiums are much higher for a 21-year-old driver than a 40 or even 50-year-old driver.
If an individual obtains a driver’s license for the first time at 30 or 40 years old, he or she may end up paying a higher premium simply due to their inexperience on the road. Other insurance companies, though, may offer a lower rate regardless.
Because singles are more likely to be involved in car accidents than married couples, simply tying the knot could drastically lower one’s car insurance rates.
Married couples have been found to be less active drivers, but when they are driving, they are considered vigilant and responsible motorists.
Combining policies is common for married couples since they often receive attractive discounts for doing so.
Although there is no predetermined credit score affecting one’s car insurance rates, lower credit scores do generally translate into higher (and less desirable) premiums for drivers.
Having poor credit could potentially increase one’s insurance rates by hundreds of dollars.
Drivers with unfavorable credit scores are more apt to miss scheduled payments, so auto insurance providers may require a significant, up-front payment from these customers for policy installation.
Car insurance companies usually review both a driver’s past coverage levels and history of filed claims.
A good frame of reference is this: an extensive history of filed insurance claims is a major red flag to most auto insurance providers.
In other words, this means the more insurance claims filed within a specific period of time, the more likely you’ll be considered a liability to an insurance company (and therefore experience inflated premiums).
Generally, insurers will consider a lack of continuous coverage another red flag. This could mean a driver was operating a motorized vehicle uninsured, and that’s obviously problematic.
Any lapses in coverage could also mean severe penalizations in certain states. On another note, higher or more extensive coverage requests typically equal a higher insurance premium.
Motorists with any form of criminal background will be deemed more of a risk to most insurance providers.
Although certain criminal behaviors are considered more of a red flag than others, any illegal, driving-related activities would be considered particularly alarming to auto insurance companies.
Level of Education
Although this factor’s relevance is highly disputed, drivers who have acquired more education are less likely to drive irresponsibly or become involved in accidents.
With this in mind, it’s definitely worth disclosing a college degree or comparable degree to your insurance provider. You may even become eligible for certain discounts with different insurance companies.
Often auto insurance providers take into account your likelihood of getting into an accident depending on your job. For example, truck drivers or delivery drivers are paid to be on the road, so statistically, these workers are more accident-prone.
Even though public servants, such as police officers and paramedics, must constantly commute back and forth for service calls, they are generally considered careful, law-abiding drivers.
Auto insurance companies also consider which careers typically involve the least filed car insurance claims.
One’s area of residence can affect insurance premiums, especially if they live in areas more prone to natural disasters or crime.
Since car insurance is state-regulated, a driver’s location is primarily based on two factors: one’s state of residence and area zip code.
For instance, living in a highly populated, congested city could increase a motorist’s likelihood of being involved in an accident (and therefore their likelihood of filing an insurance claim).
These cities may also reveal troubling factors to insurance companies, like high traffic density or likelihood of uninsured drivers.
Insurance providers can also determine significant data by identifying your zip code, such as the amount of claims filed, the severity of different types of natural disasters, or the rate of stolen vehicles.
It’s best to go with a local insurance agent near you who has access to all the regional car insurance companies you may not of heard of, but can specialize in your area.
The more “safe” miles you have under your belt, the better. For drivers who have never been involved in an accident or haven’t received any tickets, car insurance rates will be in your favor.
Motorists who haven’t maintained quite as clean a driving record will typically be considered more of a liability for auto insurance providers.
Some insurers may even refuse to provide coverage for particularly unfavorable driving records, such as records disclosing a DUI ticket. If coverage is provided, inflated insurance premiums may be in your near future.
Nonetheless, making a concerted effort to drive carefully and vigilantly can pay dividends in the long run, especially for drivers wanting to take advantage of safe driving rewards.
Depending on how many miles you drive and for what purposes, some auto insurance companies may alter your rate.
Generally, motorists spending less time behind the wheel are less likely to be involved in an accident. As a result, they prove less of a liability concern for insurance providers.
However, business commuters or drivers commuting to school pose more of a risk to insurers due to their increased time behind the wheel.
For these motorists, a business-use or commercial policy may be better. It’s important to review (and potentially alter) one’s personal auto policy stipulations if using a personal vehicle for business or ridesharing.
These policies often cost a pretty penny, since your insurance provider would be taking on even more risk compared to personal auto coverage.
To potentially see your insurance rate drop, inform your auto insurance company of any decrease in annual mileage. Some providers may even consider providing car insurance “by the mile.”
It’s important to pay attention to a car’s safety ratings since they expose not only a driver’s risk of being involved in an accident, but also the likelihood of passengers becoming injured in the event of an accident.
Safety ratings are typically calculated based on the performance of certain safety features, such as airbags, seat belts, and top-of-the-line braking systems.
A vehicle with high safety ratings generally poses less of a risk to insurance providers than a vehicle with unfavorable safety ratings.
However, cars with extra bells and whistles in the safety department could potentially inflate a driver’s insurance premiums, especially if these features are costly to repair.
If your vehicle has top-notch safety ratings or any anti-theft devices installed, make sure to ask insurance companies if you’re eligible for any special discounts.
Insurance companies consider how certain drivers may behave differently behind the wheel depending on the type of vehicle in question.
For example, an auto insurer may issue higher insurance premiums to a driver of a sports vehicle since they may engage in more reckless behaviors such as speeding.
This also means these types of vehicles would be involved in more accidents (and therefore the drivers are more likely to file a claim).
Other factors insurance providers consider in regard to vehicle type include the likelihood of it being stolen, purchase price, and standard repair fees.
Obviously, drivers will experience higher insurance premiums on a brand new car compared to a used or older vehicle. But, in the eyes of most insurance providers, older cars are more likely to be “totaled” in the event of a car accident.
Often maintenance costs for an older vehicle can prove more costly than purchasing a new car of comparable value. At this point, drivers often trade in their older vehicles in lieu of handling maintenance or repair fees.
It’s also important to remember that insurance rates often drastically decrease as the value of one’s vehicle drops.
For all intents and purposes, larger vehicles are deemed to be safer and more secure when it comes to car accidents.
Drivers typically experience lower insurance rates for larger vehicles with ideal safety ratings compared to smaller, more compact vehicles with comparable safety ratings.
Depending on the auto insurance provider, motorists may experience higher or lower insurance premiums based on whether they own, lease, or finance their vehicle.
It’s important to shop around and speak with different insurers to find the best price that fits with your current vehicle financing plan.
Types of Plans Available
For those who may be new to the world of car insurance, there are many different forms of coverage to consider.
Unlike other forms of insurance, car insurance policies are typically divided into various forms of protection.
This means drivers can determine ideal levels of coverage for the various components while satisfying their overall policy-related needs.
No matter if you’re looking into auto insurance, life insurance, or even homeowners insurance, always assess your own needs, conduct your own research, and compare competitor offerings before purchasing any form of coverage.
In simple terms, liability insurance is intended to fully cover other parties’ financial damages when you, the driver, were unequivocally at-fault in a car accident.
Liability insurance is typically a combination of Bodily Injury (BI) coverage and Property Damage (PD) protection.
Most states will require motorists to secure either liability insurance or another approved form of financial responsibility with equivalent or alternative offerings.
Sufficient coverage limits are recommended since damages out of one’s pre-established limit minimums are ruled out-of-pocket expenditures.
Collision Insurance is a form of physical damage car insurance that typically involves a separate deductible amount paid out-of-pocket per incident before coverage begins. The amount varies from provider to provider, but the deductible you end up selecting can either increase or decrease your insurance premium.
In a nutshell, Collision Insurance covers any necessary repairs to one’s vehicle when said driver is deemed the cause of an accident.
Even if a driver is ruled partially at-fault in a car accident, this type of insurance will cover any vehicular repairs while the insurance company negotiates your innocence.
If a car accident leads to a driver’s vehicle being totaled, collision insurance will honor the car’s value by paying the calculated amount to said driver.
Similar to collision coverage, comprehensive coverage is also a form of physical damage car insurance involving a required separate deductible.
However, unlike collision coverage, comprehensive insurance handles non-collision car accidents, such as theft, vandalism, or weather damage. If you hit a deer while driving, comprehensive insurance coverage will kick in.
It’s important to note that this form of coverage can be expensive, and doesn’t cover any stolen personal items.
Personal Injury Protection
Essentially, Personal Injury Protection, or no-fault insurance, covers medical expenses for all passengers involved in a car accident, no matter who’s truly at fault.
This form of insurance also often covers lost wages and even funeral costs, among other expenses.
Personal injury protection is mandatory in many states, but isn’t available in all states.
Uninsured & Underinsured Motorist Coverage
Uninsured and underinsured motorist coverage comes in handy when involved in an accident where the at-fault party doesn’t have sufficient coverage (or coverage at all).
Uninsured Motorist Coverage
This insurance is critical when the costs of any injuries or damages cannot be covered by an uninsured driver.
Even though most states require drivers to obtain car insurance or another approved form of financial responsibility, not all drivers become insured. Hit and run accidents and vehicle theft are also covered.
Underinsured Motorist Coverage
This insurance covers any injuries or damages sustained in a car accident when the at-fault party doesn’t have sufficient coverage.
Even if the affected party sued the motorist to receive supplementary reimbursement, this doesn’t mean the underinsured would be able to handle the required expenses.
Thankfully, adding this coverage to your base car insurance policy is considered low-cost for drivers who need added protection on the road.
How to Find the Best Quotes
Now that we’ve covered the most popular factors affecting car insurance premiums and standard car insurance policies available on the market, you may be wondering how to go about finding the best car insurance quotes.
There are tons and tons of car insurance providers out there claiming to offer the best car insurance rates in the industry. And this, my friends, is where the rubber meets the road.
So, what steps can one take to secure the best auto insurance quotes?
Step 1: Shop Around
Make sure to research car insurance providers with a reputable history within the industry.
However, keep in mind that the cheapest auto insurance premium for a driver in one state could be a motorist’s most expensive choice in a completely different state.
Step 2: Get Your Quotes
Once you’ve pinpointed the insurance companies you’re interested in, contact them for quotes. You can call these insurance companies on your own time to discuss quotes and coverage amounts.
Or, you can work with an insurance broker who’s trained to consider a client’s insurance needs while compiling quotes from multiple insurers.
Step 3: Compare Your Quotes
This step is much easier when you’ve exercised due diligence by conducting solid research on auto insurance providers. Insurance quotes typically vary from state to state, so make sure you’re getting the best bang for your buck on both a local and regional level as well.
Remember, insurance quotes can easily vary in hundreds of dollars depending on the provider.
Depending on your family situation, you may want to consider adding multiple vehicles or multiple drivers to a single policy to lower costs.
Step 4: Consider Dropping Comprehensive & Collision
Drivers may want to consider dumping or trading in an older vehicle if both comprehensive and collision coverage exceeds 10% of said vehicle’s entire value.
In this case, solely paying for liability insurance may be the most cost-efficient option. For drivers unable to deal with the financial implications of losing an older car, continuing comprehensive and collision coverage is ideal.
Step 5: Ask about Discount Eligibility
When shopping around for quotes, ask if you’re eligible for certain driver discounts. These discounts range from anti-theft devices and student drivers with good grades to low annual mileage and company loyalty.
Insurers may even offer special discounts for completing a defensive driving course.
Top 3 Providers
Progressive is not only a well-known insurance provider, but they’re also backed by extensive customer loyalty while extending a wide-spread online presence.
Along with maintaining ideal financial ratings and offering competitive pricing on coverage plans, Progressive offers quite an impressive suite of discount programs. Their discounts range from bundling policies and safe driver perks and convenient roadside assistance capabilities.
QuoteWizard helps drivers easily find and compare the best car insurance rates. Known as the largest American independent insurance provider, QuoteWizard computes ideal car insurance rates in a flash from a variety of carriers at the lowest price.
By simply providing your area zip code, this comparison tool compiles rate information in response to your specific location. Policyholders are also offered great bundling options to help save even more money.
When most people think of State Farm, two characteristics come to mind: unmatched financial stability and customer satisfaction. With their great mobile app and website, drivers don’t have to visit brick-and-mortar stores or agents anymore to explore car insurance rates and bundling options.
Discounts are also available, such as their accident-free or good student perks.
Even though there are certain risk factors you can’t control, such as your age, there are plenty that can be changed or monitored, such as personal driving habits or one’s credit score.
For example, newlyweds may experience a decrease in insurance rates, whereas a business commuter may see an increase in insurance premiums when relocating to a densely populated city.
Remember, though, each auto insurance provider weighs these factors differently using different algorithms.
If the top three insurance providers mentioned above don’t provide the best coverage for your needs, conduct your own research to find the best policy at the best price.
Securing an ideal, yet cost-effective auto insurance package from a reputable company not only provides peace of mind, but also ensures financial security for years to come.