Understanding what factors affect your car insurance rate is important—after all, you don’t want to pay more than you have to for coverage. Here are some of the biggest factors affecting car insurance rates along with tips for calculating yours accurately:

Top Factors

Top factors determining your car insurance rate include:

● Age: Research indicates younger drivers are more likely to get into car accidents, with those age 17 to 25 paying the highest premiums.
● Occupation: Certain jobs are thought by insurance companies to feature higher risk of claims.
● Location: Living in an urban area with more traffic means greater risk of accidents, and therefore higher insurance rates.
● Use: How you use your vehicle affects your rate. For example, if you use it to commute on a daily basis, you’ll pay more.
● Driving Record: Points on your license and previous claims make your rate go up.
● Vehicle Type: The type of car or truck you drive significantly affects your insurance rate, as more expensive vehicles are subsequently more costly to repair.
● Named Drivers: Who is insured to operate your vehicle? The named drivers on your insurance policy affect your rate, and if you have a young, inexperienced driver on the policy you might pay more.

Calculating Your Rate

Factor in your driving record and age and then total your automotive claims. Insurance companies use driving and claims history as a method of predicting future claims, and if yours is an issue, you’ll definitely pay for it. If your claims history is significant, you can count on your rate going up.

Give your car a thorough evaluation. Keep in mind that every insurance company has its own vehicle rating system, though most adhere to the Insurance Services Office system. Vehicles are rated on a scale of 1 to 27 to determine safety, theft data, and cost. If your vehicle is new and more expensive to repair, you’ll pay a higher rate.

Calculate auto policy discounts, as most companies offer a number of options such as multi-car discounts for those insuring numerous vehicles. Other discounts include those for good driving and solid academic records. Senior drivers frequently receive discounts as well.

Don’t forget to acknowledge your location when calculating your rate, as well as your credit score. Insurance companies have used credit scores to help determine premiums since 1995. You should also think about how often you use your vehicle. Is it driven only a few times a month? Every day? Is it utilized for commercial purposes, such as the pickup and delivery of goods?

If you’re planning on insuring other people, you’ll need to add them to your car insurance equation. Factor in how much liability coverage you want, deductible limits, and the type of insurance, such as collision, comprehensive, and medical. You’ll also need to consider any endorsements you have on your policy. Endorsements are also known as “riders” and are used to increase or reduce how much insurance you would receive in various “special” situations.

Use these tips to get a solid idea of what your car insurance will cost.