Car insurance is not only necessary, but required by law in many states as well. While many people are aware of the basic factors that determine your car insurance rates, such as age, gender and history, there are other issues that are calculated as well.
Here are six things you might not know that will affect your auto insurance rates:
Your relationship status can affect your auto insurance just the way it affects your taxes. If you are married, then you are filing as a couple. This means you would be adding a person to your current auto insurance plan. If your spouse has a bad driving record, then your rates will be increased. You are essentially now partially responsible for some of the added risk associated with a bad driver. Likewise, if both you and your spouse have stellar driving histories, then your rate might go down slightly because insurance companies incentivize safe drivers with lower monthly premiums. There are also family deals on auto insurance that can change your rate as well.
Even if you live in a safe neighborhood in a major city, if you share the same zip code as a highly populous area, you will likely pay higher premiums. This is because larger cities have more people, cars and accidents on average. Even if you have a perfect driving record, you will unfortunately be lumped in with the larger demographic as a whole. The increased rate allows insurance companies to spread out the cost of covering riskier drivers over a larger population.
Number of vehicles
The number of cars you have under your name can change your insurance rate because it will cost more to insure all of the vehicles combined. Even if you aren't the one driving the vehicle, or if it's not being driven at all, the fact that it exists makes it more likely to be damaged. More vehicles means more chances of accidents.
Type of vehicle
Larger vehicles tend to be more costly because they naturally have an increased risk of being damaged based on their size. Bigger trucks take longer to brake and are less able to fit into parking spots. This means they are more likely to get hit, which the insurance company will have to cover. Cars with better handling, gas mileage and history of good driving records will require less expensive coverage.
If you are purchasing a used car, then the previous owner's record will reflect on you. Insurance companies are able to look up how many accidents the used car has been in - even before you bought it. If it shows that your car has a history of problems, then it will be assumed that the car is likely to have problems in the future. That's why it's important to find out the history of your car before you buy it.
The more education you have, the less risky you are to insurers. Higher education means you are more likely to make better decisions regarding safety. Your insurance rate can change based on your level of education and employment.