Car insurance premium rates can feel arbitrary and unjust to many of us.
But what affects car insurance rates and why?
Turns out, its not so arbitrary.
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What Affects Car Insurance Rates?
Lets start with the obvious: your driving record.
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Your driving record and a continuous car insurance history are two important factors, Davis said.
The number, frequency and circumstances of your insurance claims will also be major factors.
Your age and driving experience will have a major impact.
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Its not about discrimination.
As Insure.com points out, its all about the numbers.
However,California,Hawaii andMassachusettsdo not allow insurers to use age to determine your rate.
What are the parts of the algorithm you dont know about?
Here are seven surprising factors that may affect your car insurance rate.
Your Sex
In most states, your sex can directly affect your rate.
Those differences and the rate differences they cause diminish with age.
These statesdo not allowyour sex to affect car insurance rates:
2.
What Kind of Car You Drive
First, lets debunk a big myth: Red carsdontcost more to insure.
However, the make and model of your car could make a difference.
Different cars cost different amounts of money to insure.
Thats because data shows certain cars are more likely to be in accidents or have insurance claims filed.
They also tend to be driven by younger, riskier drivers.
Weird regional data may affect your rate, too.
It all adds up.
The car insurance laws in your state could also affect your rate,according to NerdWallet.
Well, being married is kind of boring, statistically.
Massachusetts is the only state that doesnt allow auto insurers to use marital status to set rates.
Your Credit History
Ah.
If youvelived with a poor credit score, you know it pops into your life unexpectedly.
Youll likely see a hike in your premiums due to a low credit score, Insure.com reports.
AUniversity of Texas Studyalso found those with lower credit scores incur more car insurance losses and higher claim payouts.
OnlyCalifornia, Hawaii and Massachusettsdont let insurance companies use credit scores to determine your rate.
How You Use Your Car
This is important, especially if youmake your living through the sharing economy.
Unfortunately, these policies will probably cost you more than a personal policy.
But theyll also cover you in case anything happens while youre driving for work.
Moving into the suburbsmight not be as big a money-saver as you expect.
He recommends you:
1.
Buy a Cheaper Car
Generally, the more expensive the car, the more expensive it is to insure.
you might save money upfront and over time by sticking with cheaper cars.
Want to see to it youre still getting a quality vehicle?
Check out our list of thecheapest (and most expensive) cars to maintain.
Purchasing a car you know is safe will be better for your wallet and your peace of mind.
Most car insurers provide discounts to student drivers who maintain good grades, Brower said.
In some states, younger drivers are also able to take driver safety courses that will lower premiums.
Drive Less Often and More Carefully
Consider joining a carpool, or take alternate transportation when possible.
Driving fewer miles could help reduce your premium.
And when you drive, be careful.
Safe drivers can take their rates into their own hands with usage-based insurance programs like ProgressivesSnapshot, Davis explains.
Snapshot offers discounts by collecting information on your actual driving habits.
Insurers love a clean driving record, Brower added.
The drivers sharing the road with you will love it, too.
Shop Around
Dont settle for the first quote you get.
Before signing up, verify you do your research and find the best deal for your situation.
Dana Sitar (@danasitar) is a former staff writer at The Penny Hoarder.
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