What Factors Affect the Price of Car Insurance Rates? | Gabi

You’ve probably looked at the monthly cost of your auto insurance and wondered if it was pulled out of thin air. With the complexity of car insurance, it might seem that way. So, what factors affect car insurance rates? The experts at Gabi are here to help demystify all things related to the insurance industry. Here are the four main factors that go into calculating your rates on auto insurance.

Factor #1. Driving Experience

The more years you’ve been licensed–especially with a clean driving record (no tickets or at-fault accidents)–the lower your cost of insurance will be.

Factor #2. Vehicle Rating

Fast cars have a higher probability of causing a major accident. Expensive cars are expensive to repair. More commonly stolen vehicles are more likely to be targeted by thieves. The “riskier” the car–as defined by the factors above–the more expensive your insurance rates.

Factor #3. Coverage Limits

These should be selected based on your protection need. A high-net-worth driver will need higher liability limits since they have more assets exposed. It’s better to be slightly over insured then slightly under insured.

Factor #4. Location

Each zip code is unique in the eyes of insurance companies. Your insurance cost will be higher if a company has paid out more claims than average in your zip code. Because this factor changes constantly, it’s important to shop again for insurance at every renewal.

While the exact calculations that go into your monthly rate may be extremely complex and constantly changing, the insurance rating factors remain relatively constant. Make sure to keep them in mind when you’re in the market for auto insurance.

Gabi finds you a better home or car insurance for an average savings of $961/year.
It only takes 1 minute to register and connect your current insurance account.
Click on the button below to get started.