Your Auto Insurance Premium

Is determined by key elements that Insurance Companies believe indicate the security risk that an individual may pose. Different companies may not always hold the same elements in equal regards, which explains contrasting premiums in rival Companies, but they do consider and assess the same general statistical data. Compiled below is a list of the most influential elements that either lower or raise your car insurance premiums.

The data collected that Insurance companies use can be divided into two distinct groups, static and elastic data.

Static data would include elements such as gender, or age – things that are fixed and out of your control to change.

Elastic data would include elements such as car type and driving record – things that are in your control.

Static Data

Age: Drivers between the ages of 17 and 25 are considered more risky than older drivers.                            26 to 55 years age groups of drivers are considered the safest. However, on the other side of the      spectrum very elderly drivers might need to pay higher insurance rates as their driving reflexes        are considered slower.

Gender: Women are considered safer drivers than men, statistically speaking men are more likely to speed as opposed to women. Because of this women get offered marginally lower rates than men.

Education: People that have graduated from college are offered lower rates. The logic that works here is that higher education leads to better choice making, lowering the chances of a accident.

Age of the car: The older the car, the less is the insurance rate as the value of the car depreciates over time. New cars attract higher rates as they are in good shape.

Elastic Data

Car type: Standard car models will attract lower rates than expensive and exclusive cars. Cars built for speed receive higher premiums than standard issue model cars.

Driving record: A driving record decorated with tickets and fines all over it will directly spike insurance rates. Fortunately on the other hand, a clean driving record indicates a careful, trustworthy driver and lower rates are offered

Geographic location: While, not everyone can change their homes on a whim, individuals that live in proximity of crime ridden neighborhoods will receive higher premiums because the risk of damage to your property is higher. Likewise, if you live in a quiet neighborhood, with little or no traffic, rates will be comparatively lower.

Credit rating:  A good credit rating is indicative of an individual that makes good decisions. Having a good credit rating gives the impression to Insurance Agencies that the applicant is less of a risk. Basically, the better the credit rating, the lower the rate.

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