Lyles Insurance
  • Home - Lyles Insurance
  • About Us
  • Contact Us
  • Blog
  • Request A Quote

What are the major factors used in calculating my auto insurance rate?

5/17/2018

0 Comments

 
You’ve probably wondered what factors auto insurance companies use to calculate your insurance rate. There are basically nine major factors that auto insurance companies use.  I will list each one of them and give an explanation as to how they affect your rate. I get asked all the time, “Why does my neighbor have higher coverage than I do yet still pays a lower auto insurance rate?” …… The answer to that question is one of two things: Either (A) it’s because of a combination of the nine factors listed below, or (B) your neighbor did a better job of shopping around for auto insurance than you did.
 
       The thing you need to keep in mind is that no two auto insurance companies prioritize or weigh these factors exactly the same.  Every company does their own thing when it comes to how they calculate auto insurance rates.  Therefore, there is no way for me to prioritize this list.  But you’ll still get a good understanding of what goes into calculating auto insurance rates. So let’s get started with these factors……
 

 1. Age – Driving ages usually range from 16-85…. Drivers toward the outer parts of that range tend to pay more than people in the middle of that age range. That is, someone in their 40’s, 50’s or 60’s will pay less than teenagers or drivers in their late 70’s or 80’s. But again, each company sets those age ranges differently.


 2. Location – While traffic crash and crime statistics do play a part, the size of the town you live in usually is the biggest indicator…. Generally, people who live in smaller towns pay less than people from big cities.


 3. Residential Status – Homeowners pay less than renters do… Being a homeowner usually includes a big discount with most companies.


 4. Marital Status – Married drivers pay less than single, separated or divorced drivers. You might think this is silly and perhaps unfair. But crash statistics don’t lie, and married people tend to be in fewer accidents than unmarried people. As far as people who are widowed, some companies classify them as still being married, while other companies classify them as being single.


 5. Credit Rating – If we tried to prioritize this list by importance, credit rating would jump all over the place from one company to the next. Some auto insurance companies make credit score a huge factor, while others only figure credit score in as a tiny factor. Some companies check credit scores like a credit card company would. Other companies only do soft credit pulls…. The good news is that shopping around for auto insurance doesn’t affect your credit like shopping around for credit cards does… Some credit scores get dinged by having multiple credit card or loan inquiries…. Fortunately, that’s not the case with auto insurance. It doesn’t hurt your score at all to shop around for auto insurance.


 6. Driving Record and Claims History – This tells what accidents, tickets and prior insurance claims you have. These are obtained by two major sources; your MVR (Motor vehicle report from the state BMV) and your CLUE score (your auto insurance history). Obviously, someone with a clean record will pay less than someone with dings on their driving record.


7. Having Prior Insurance – This also tends to be a big factor with most auto insurance companies. Having at least six months of active auto insurance coverage usually gets a big discount. Some companies will offer even bigger discounts for having active coverage farther back than six months. Some companies will also offer bigger discounts for having liability coverage that is higher than state minimum levels.


 8. Gender – Men may joke about “women drivers = no survivors”, but the reality is that it is not true. Statistics show that women are the safer drivers, and thus pay a slightly lower rate than men.


​ 9. Vehicle(s) insured – This is broken down in two parts:

  • Liability coverage – Generally, the larger the vehicle and/or larger the engine, the more expensive liability coverage is.
 
  • Physical Damage coverage (Comprehensive & Collision) – If you carry comprehensive and collision coverage on your policy, the rate is mostly determined by the value of the vehicle. Obviously, the higher the value, the higher the premium.
 
 
Those are the nine major factors. Auto insurance companies prioritize them any way they want to. That’s why it’s important to shop around for auto insurance at least every two years.
 
 
Get an auto insurance quote with Lyles Insurance


Call me for a Quote



Related Blog Articles:

​Video: Why Anonymous Online Auto Insurance Quotes are Useless
​

​Video: Basics of an Auto Insurance Policy

Video: 10 Most Common Auto Insurance Myths/Lies you hear people say

Video: Factors used in calculating Auto Insurance Rates

Video: Do's and Don'ts of buying Auto Insurance Online



0 Comments



Leave a Reply.

    Picture

    Author

    Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..

    Archives

    March 2021
    November 2020
    September 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    October 2019
    September 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    March 2018
    February 2018
    December 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    October 2015
    August 2015
    December 2014
    November 2014
    October 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    May 2012
    April 2012
    March 2012
    December 2011

    Categories

    All
    Things You Must Know When Buying Snowmobile Insurance In Michigan

    RSS Feed

Lyles Insurance copyright 2020
  • Home - Lyles Insurance
  • About Us
  • Contact Us
  • Blog
  • Request A Quote