3 Weird Factors That Affect Your Car Insurance Rates

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Car insurance premiums depend on more than the driver’s vehicle and accident history. Here are three little-known factors that affect rates. [[{“value”:”

Car insurance rates are as unique as each driver. Insurers consider a variety of factors when setting premiums, including things like the driver’s history of accidents and speeding tickets and their vehicle make and model. Location matters too as it affects the risk of auto theft and storm damage.

It’s easy to understand the logic behind these things, but not all car insurance factors are this straightforward. The following three things can affect premiums too, depending on where the driver lives and the insurer they work with.

1. Marital status

Married couples typically pay lower auto insurance premiums than single adults. This might seem unfair, but insurance companies contend that married couples are usually more stable and have a reduced risk of accidents. Some believe that married drivers may also spend less time behind the wheel as each partner splits driving responsibilities.

There are other reasons married couples pay lower rates as well. They typically have several cars to insure and many are homeowners as well. Both of these things can lead to car insurance discounts that may be more difficult for single drivers to achieve.

2. Education level

Many auto insurance companies ask drivers about their highest level of education during the quote process. This might seem bizarre, but it comes back to risk again. Drivers with higher levels of education are generally perceived to drive more safely and get into fewer accidents.

Obviously, this isn’t the case for all drivers. But it’s still something many companies weigh when setting premiums. It won’t be enough to eclipse a poor driving record, though. Demonstrated risky behavior behind the wheel as evidenced by tickets, accidents, and DUIs will raise any driver’s rate, even if they have a Ph.D.

3. Credit score

Car insurance companies also contend that drivers with higher credit scores typically have a lower risk of accidents, so these drivers often pay lower rates. Companies assess an applicant’s credit score by requesting their Social Security number during the quote process and doing an inquiry on their credit report.

There are currently four states — California, Hawaii, Massachusetts, and Michigan — that prohibit insurers from using credit scores to calculate auto insurance premiums. Drivers who live in one of these states don’t have to worry about poor credit affecting their premiums, but if they demonstrate any risky behavior behind the wheel, insurers will be quick to charge them for it.

How to find the best deal on car insurance

Understanding the factors that insurance companies use to set auto insurance premiums is helpful in finding the best deal, but nothing beats comparison shopping. It’s best to get quotes from at least four to five insurers before selecting one to work with. Price is obviously an important factor, but it’s not the only one worth considering.

Coverage options vary by provider. All will offer at least the state minimum coverage required to drive legally, but most also have a variety of optional add-ons. Some of these, like ridesharing or gap insurance coverage, aren’t available with every company. Those seeking specific protections should first make a list of which companies even have what they’re looking for before getting quotes.

It doesn’t hurt to look over the insurer’s list of discounts, either. Some companies offer special savings for things like being in the military or owning a hybrid or EV. This could be enough to tip the scales in a driver’s favor if they qualify for them. But keep in mind that more discounts don’t always translate to a lower premium.

Finally, if premiums are still too high, drivers can try raising their deductible. However, this increases out-of-pocket costs in the event of an accident. So it’s often a good idea to save for this in an emergency fund before agreeing to a high deductible.

Drivers should also keep in mind that their risk profiles can change over time and so can the algorithms that insurers use to set their rates. So while there may not be anything affordable right now, that could change in a few months.

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