Credit Score Articles

What Factors Influence Your Car Insurance Rates?

Two cars parked on opposite sides of the street.

When it comes to your car insurance premiums, you watch the way you drive, but are you also watching your credit history? Whether you consider yourself a pro behind the wheel or a novice with a less-than-perfect driving record, discover the lesser-known factors that influence your car insurance rates, from your credit score to your marital status.

Credit History

Where permitted, your car insurance company may be using your credit score to determine your cost of car insurance. Although 46 states are legally able to weigh your three-digit credit score into their rate assignment decisions, California, Massachusetts, Hawaii and Maryland currently do not, according to AutoInsurance.org.

Insurance agencies use credit scores to correlate a policy holder’s likelihood of getting in an accident or filing a claim, drawing a parallel between those with high credit scores and low risk policy holders. In short, the better your credit history, the lower your car insurance rates may be.

Driving History

Your car insurance rates are also calculated based on your driving record. Most states work on a point system, which are determined by the state you live in and the nature of your infraction. Just like factors on your credit report, how long points remain on your driving record is also based on the state and nature of the item, but in all states, any tickets, accidents and parking violations can all send your cost of car insurance skyrocketing.

Age, Gender and Marital Status

Factors such as age, gender and marital status can raise or lower your car insurance rate, as well. A driver who is new to the road is viewed as a higher risk than someone who has racked up years behind the wheel; and, married women tend to catch a break on car insurance rates while unmarried men pay the highest premiums.

Other Factors that Influence Your Car Insurance Rates

Your car insurance premiums are also determined by your car make and model, average mileage per year, anti-theft devices installed on your vehicle, your location, and the deductible you are willing to pay out of pocket should you file a claim. When trying to estimate your car insurance costs, keep in mind that newer, more expensive car owners can expect to spend more on insurance, as well as those who spend more time on the road or live in high-theft areas.

Although you may not have control of all factors that influence your car insurance rates, you can cut your cost of car insurance by checking your credit history for accuracy, choosing a more economical vehicle, and even installing an alarm or anti-theft device on your ride. And, don’t forget to check with your car insurance provider when it comes time to renew; improvements in your credit score or a decrease in how far you drive could mean money in your pocket.