7 Factors That May Impact Your Auto Insurance Costs

Posted by Shaun Murphy, Pablo Beach Insurance October 8, 2015
Your Vehicle’s Safety Ratings Can Impact How Much You Pay for Car Insurance

An Independent Agent Explains:

How Car Insurance Rates Are Determined

This post is part of a series of insurance blogs on Safeco.com showcasing the expertise of independent insurance agents and aimed at helping you understand important insurance coverages and issues.


When it comes to car insurance, there’s no one price-fits-all scenario. In fact, car insurance costs can vary greatly from driver to driver, carrier to carrier and even state to state.

It’s not only about which coverages you select. Many other factors can also impact your car insurance premium – here are seven of them.

  1. Driving history: If you’ve been involved in a lot of accidents and received more than your fair share of traffic tickets, the result is almost certain to be higher car insurance costs. The good news, however, is that the inverse is typically true as well. So, watching the speed limits and not driving distracted are two ways to not only stay safe but to potentially lower your car insurance rates, too.
  2. Deductible and discounts: Don’t forget these two factors if you’re trying to keep your car insurance costs low. Oftentimes, a higher deductible results in a lower premium, so select the highest deductible you can manage. Remember, you’ll need to pay the amount of your deductible out of your own pocket in the event of a covered loss. You also may save on car insurance by taking advantage of special discounts. These can vary depending on your carrier but are typically available if you insure both your home and car with the same carrier, if you take an accident prevention course or if you drive your car infrequently.
  3. Your vehicle and how you use it: The more time you spend on the road, the higher the chance of something happening. So, if you have a long daily commute, you should expect to pay more for your car insurance. Your vehicle makes a difference in your car insurance rates, too. If you drive a vehicle with solid safety ratings or one that has a high likelihood of theft, your rates may go down or up, respectively.
  4. Your home: What does your home have to do with car insurance rates? Where you live can oftentimes either increase or decrease your chance of an accident or other incident. For example, metropolitan areas have more traffic, so there’s likely a higher chance of being involved in an accident than a rural area with less traffic. So, those who live in a high-density area may pay more for auto insurance. Drivers in any area, however, may pay less if they own their homes. Many carriers offer a car insurance discount if you own a home, townhouse or condo.
  5. Age, marital status and gender: Believe it or not, married drivers typically have fewer auto accidents than non-married drivers, so the former may pay less for their car insurance. Young, inexperienced drivers typically pay more, so keep this in mind if your kids are nearing driving age. And, finally, female drivers often experience fewer accidents, so they may receive lower rates than males.
  6. Credit history: Data has shown that those with higher credit-based insurance scores typically have fewer claims over time. So, keep your credit in check if you want to keep your car insurance costs in check, too. Though, in some states, carriers are not allowed to use your credit history in determining your car insurance rate.
  7. Previous coverage: If you’ve ever had any gaps in your coverage or you’ve carried lower-than-recommended limits in the past, you may find yourself paying more for car insurance today.

So, you see, there are a lot of factors that go into determining your car insurance rate. In the insurance industry, we call them “rating factors.”

If you want to better understand which of the above rating factors may be impacting your car insurance costs, I encourage you to talk to your local independent insurance agent. And, remember, your rating factors can change, so check in with your local agent once a year to review your insurance policies and make sure they are still a good fit for you.

Happy driving!


Shaun Murphy, Independent Insurance Agent

About Shaun Murphy and Pablo Beach Insurance
Shaun Murphy brings 27 years of insurance experience to Pablo Beach Insurance, the independent insurance agency he founded in 2005 with his wife, Emily. Pablo Beach Insurance has three locations across Florida and counts one of the Murphys’ children, Spencer, as part of its leadership team. Shaun strongly believes in providing customers with a broad choice of insurance coverages from a variety of carriers and at a variety of prices. That’s why he started Pablo Beach Insurance, after experiencing firsthand how limited customers are when purchasing insurance directly from a carrier rather than from an independent agent.

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