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Non-Driving factors that affect auto insurance rates

Fact-checked with HomeInsurance.com

It shouldn’t surprise you to know that your driving record affects your auto insurance rates. If you’re an unsafe driver, your insurer will raise your rates to protect against risk. Likewise, if you’ve never had so much as a parking ticket to your name, your rates may be lower because your insurance company knows you’re less likely to make a claim on your policy.

You might be surprised to find out that there are many factors that aren’t related to your driving ability that impact your insurance rates. Some of these factors — like your age or marital status — you can’t do anything about. But others, such as your credit rating, are within your ability to improve and allow you to lower your car insurance rates.

“Many people are surprised that your auto insurance rates depend on many factors, even some that have nothing to do with your vehicle or driving,” says insurance and finance expert Laura Adams. “While driving history — such as getting traffic tickets for moving violations and car accidents — plays a significant role in your auto insurance premiums, your demographic information matters, too.”

What affects car insurance rates? Let’s take a look.

What factors affect car insurance rates?

Auto insurance premiums are scientifically calculated using proprietary algorithms that each company develops, based on nationwide data that shows how many accidents and other claims happen across a broad range of risk factors — the majority of which are not driving-specific. The higher the risk of a claim, the more likely the consumer will pay a higher premium.

“For instance, the ZIP code where you live and park your vehicle is important to auto insurers,” says Adams. “If a car is located in a high-crime area, it’s more likely to be stolen or vandalized. Living and commuting in a high-accident area means there’s a greater chance that you could get involved in an accident and make an insurance claim.”

Or consider gender, another of the characteristics that determines your rates. National statistics show that men, especially young men, are involved in accidents more than women. Based on that data, insurance is different for men vs women, most notably during the teen years. It might not seem completely fair this way, but it’s not arbitrary — it’s based on solid statistical information.

Non-driving factors that affect auto insurance rates

Aside from gender and ZIP code, what other factors affect car insurance rates?

Creditworthiness

Generally, you’ll get a better rate if your credit report data is limited. Opening numerous credit accounts, buying a car, late payments and mortgage rate checks will all show up on your credit rating with the Big Three rating organizations (Equifax, Experian and Transunion). All that activity makes underwriters uneasy, which can result in higher rates. 

Education

There are a couple of ways your education may affect your rates. As a young driver, you may earn a discount if you’re a good student with a B or higher grade point average. In addition, insurers often offer discounts to members of various organizations, sometimes including the alumni of colleges and universities, as well as fraternities and sororities. It’s also worth asking for a discount if you’re a member of any other organization, such as Rotary or Kiwanis International.

Deductibles

As you might expect, the higher the deductible you choose for your coverage, the less you’ll end up paying in premiums. “Your deductibles for collision and comprehensive coverages are additional non-driving factors that affect your auto rates,” agrees Adams. “Setting higher deductibles means paying a lower premium, but paying more out-of-pocket if you need to make an insurance claim on a damaged or stolen vehicle.”

Marital status

Again, the statistics tell the tale here: married drivers have less accidents than single drivers, and engage in risky driving behavior less often. So getting married is likely to lower your premium rate — and is a good reason why you should check in regularly with your insurance agent to see if there are any new ways you can save money as your life circumstances change.

Homeownership

Almost every major insurer offers a discount for bundling your policies. You may also be eligible for a discount if you bundle renters insurance with auto, but it likely won’t be as large. 

Age & gender

According to Adams, “other non-driving factors that determine how much you must pay for car insurance include your age and gender. Carriers say that younger drivers or those with fewer years of experience behind the wheel are statistically more likely to have an accident. And the same goes for young male drivers compared to their female counterparts.”

Type of coverage

Adams also says your rate will be directly impacted by the amount you’re covered for. “Of course, the types of coverage you choose affects your auto premiums,” she says. “For instance, you might opt for more liability coverage than your state minimum or skip collision or comprehensive coverage for an older car. The more coverage types and amounts you choose, the more you typically pay.”

Why do non-driving factors impact rates?

Determining what factors affect car insurance rates is done by looking at data from drivers across the country and evaluating risk of accidents or claims. Each policy is unique to each driver, with rates reflecting their individual variables. To see how this affects a rate, take a look at the example below:

  • Male driver, 22 years old, unmarried: 12 month premium of $2,839
  • Female driver, 22 years old, unmarried: 12 month premium of $2,592

The differentiating factor here is gender. The average insurance underwriter will evaluate historical data that shows how many claims are made by drivers who fit this profile and find that significantly more males than females submit claims. In order to cover those increased claims and also make a profit, the male driver must then pay more.

The same is true when evaluating credit rating, ZIP code, age and all other variables; insurers charge higher rates to mitigate risk posed by drivers.

How to lower car insurance rates

Some of the non-driver factors that influence your car insurance rates — your age and gender, for example — are beyond your control and there’s not much you can do about them. But others are factors that you can change and potentially lower your rates. These include the following:

  • Credit rating: good organizational skills and diligent payment of debts can improve your credit rating quickly. 
  • Bundling: whether you rent or own, getting your car and homeowners or renters insurance from the same company can result in an easy discount.
  • Raising your deductible: If you can afford to raise your deductible, you’ll save on premium costs. Only do this if you know you can pay out-of-pocket in the event that you make a claim, and keep in mind that savings might be minimal.
  • Search out discounts: it’s worth asking your agent if there are any discounts that can be applied to your policy. Most of the big insurers, like State Farm and Allstate, offer multiple discounts that are easy to earn.
  • Avoid making claims for small fender-benders: if you will end up with a check from your claim that’s just a few hundred dollars or less, consider just paying for the damage yourself. A small claim may not be worth an increased premium.

The takeaway

  • Most of the factors in determining your premium costs aren’t related to your driving.
  • Your age, gender, marital status and more impact your car insurance premium.
  • Your premiums are determined by data collected at national levels.
  • Although you can’t impact all these factors, you can save money through improving credit ratings, raising your deductible, and more.

Conclusion

Insurance premiums are based on numerous factors unique to each driver, but not all are related to driving. Underwriters look for people with clean credit ratings, a good driving record, and a history of multiple policies with the same company. While not all factors that influence rates are under your control, some non-driving factors can be positively affected to reduce your rate or keep it low.

Mary Van Keuren

After 30 years as a writer and editor in academia, Mary now writes full-time for the insurance and finance industries. Her work has appeared on Reviews.com, TheSimpleDollar.com and Bankrate.com, as well as other consumer-focused websites.

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