13 Hidden Factors Driving Up Your Car Insurance Premium

Well-known factors that influence car insurance premiums are your age and driving record, but several other factors also play a role.

While there’s nothing we can do about some of these factors, it is possible to make changes that affect many of them, resulting in a lower premium.

We’ve made a list of 13 hidden factors that drive up your car insurance premium and how you can fix it when possible.

Age And Gender

We all know that young and inexperienced drivers are more likely to be involved in an accident, so insurance companies usually charge more. But even your gender is a factor when they calculate your insurance premium.

While you’ll get older with time, changing your gender is a lot more involving and certainly not something we recommend to lower insurance costs. However, some States don’t allow insurers to differentiate by gender, so moving is an option. In most cases, female drivers pay less than male drivers, and while this price gap decreases with age, it doesn’t completely disappear. Young men will always have the most expensive insurance, and older women get the best deals.

Marital Status

We have some news for all those saying marriage doesn’t have benefits. If you’re into cars or just want to lower your car insurance, there’s certainly an upside.

Large insurance companies often have lower rates for married car owners, as statistics show that couples and families make fewer expensive claims than those who are single, widowed, or divorced.

Education And Occupation

According to insurance companies, highly educated people don’t file as many claims, so it makes sense that they offer them lower insurance premiums. That said, this practice has come under fire, and in some states, it’s being discontinued.

There are also certain occupations that get lower rates for the exact same reason. Again, some states are leaving this practice behind, and if you live in one of those, you don’t need to become a doctor or scientist to lower your insurance premium.

Address And Car Storage

Your location is a fairly obvious factor that affects your car insurance rates. Those living in a crime-ridden area will have to pay more than someone living in a rural area, as there’s a higher risk that their cars will be stolen or vandalized.

If moving isn’t an option, it’s still possible to lower the insurance by parking in a garage or fenced-in area rather than on the street.

Credit Rating

Using people’s credit ratings to calculate the insurance rate is a common practice, but it certainly has its critics, and some states don’t allow it.

The credit-based insurance score used by insurance companies differs from the regular credit score, but the latter is still a good indicator of the insurance score. Even if you’re a good driver with an impeccable driving record, a poor credit rating can mean you’ll pay as much as a poor driver.

Yearly Mileage

It makes sense that insurance companies offer cheaper car coverage to low-mileage drivers. Spending less time on the road means there’s less risk of being in an accident.

Those who don’t drive much can also save some money by opting for pay-per-mile insurance. As the name implies, the premium is based on the number of miles driven.

Driving Experience

How many years of driving experience you have under your belt can impact the insurance rates significantly. Someone who started driving at 25 will have to pay more at 28 than someone of the same age who’s been driving since they were 16.

The good news is that the insurance premium will drop steadily as time passes and you gain more experience behind the wheel.

Car Make and Model

The car make and model are among the main factors influencing your insurance rates. Insurance companies base this on their experience with the vehicle in question, how the owners drive, how expensive the car is to repair or replace after an accident or theft, etc.

For example, it’s usually more expensive to insure a fancy sports car than a Toyota Prius — unless there’s been a wave of Prius thefts in your area. Sports car drivers are often more likely to speed, and fixing a Ferrari will never be cheap.

Car Trim Level

It’s not just the car make and model that affects insurance rates. Even the trim level is a significant factor. Again, this is because some trims are more popular among thieves, they may have more power, or they may have other equipment that makes them expensive to repair.

If you’re looking to purchase a new car, it’s definitely worth keeping this in mind. By avoiding the highest trim, you’ll save money on both the price and insurance costs.

Car Safety Features

Safety equipment can be a double-edged sword in the car insurance realm. On the one hand, a car that’s jam-packed with such technology will be safer in case of an accident, thus it may qualify for discounts.

On the other hand, insurance premiums may increase when a car is equipped with certain high-tech safety features, as these can be expensive to fix after an accident. We suggest contacting the insurance company before purchasing the car and then deciding whether safety or money is more important.

Insurance Lapses

Insurance companies will view you as a high-risk client if you’ve previously failed to pay your car insurance bill or canceled a policy because you were between vehicles. At the very least, they’ll increase your insurance premium; some may even refuse to insure you.

If you know you can’t afford your current insurance costs, we suggest that you pause or reduce your coverage or shop around for a cheaper option. If you’re currently on full coverage, you can chop a huge chunk off the bill by reducing it to minimum coverage. Another way to lower the premium is to go with a higher deductible, but remember that insurance payouts will be lower.

Insurance Company Loyalty

Loyalty often pays off, but it’s a bit of a hit or miss when you’re dealing with insurance companies. Some will reward your loyalty and offer discounts after sticking with them; others do the exact opposite.

That’s right, there are insurance companies that will “punish” you for remaining with them. They try to predict who’s least likely to switch companies and then give them higher rates, a practice known as price optimization. Luckily, this is banned in some states.

Increase in Claims and Costs

You may have noticed that everything has become more expensive in the last few years. Rising costs have a massive impact on our day-to-day lives and personal economies, but they also affect insurance companies as cars become more expensive to repair.

In addition, an increase in insurance claims will also impact your insurance premium, as the company will have to cover the expenses.