Empower Blog

April 25, 2022

5 Key Factors Affecting Auto Insurance Premiums

The auto industry is dealing with a major increase in loss costs over the past year, which has led to an increase in auto insurance premiums. While this is something you cannot control, here are the top 5 factors that affect auto insurance premiums to keep in mind when shopping around.

Car Make and Model

The type of car you drive can have a positive or negative impact on the rate you pay for auto insurance. If you purchase a brand-new sports car, you are likely to run into a more expensive premium than if you would have purchased an older model sedan. The bottom line is, if a vehicle costs more to replace, the insurance company is going to charge you more each month to cover these potential expenses. Insurance companies will also take into consideration the safety of the vehicle, as safer vehicles are less likely to lead to expensive claims.

Your Age

If you are a young driver, you are likely to pay more for car insurance than your parents or older friends. This is because teen drivers are considered more of a risk to insurance companies because they have less experience on the road and are more likely to get into an accident, causing the insurer to have to pay out on your policy. Insurance rates typically start to decrease after you hit age 25.

You could also say the same for the opposite end of the spectrum. As you get older, especially once you hit the age of 65, you may see your auto insurance premium rise. This is because the insurance carriers believe there is a greater statistical chance you experience an auto incident, and you are more likely to be injured in the event of a collision.

Your Driving Record

Your car insurance company is going to take a look at your driving history when calculating your premium. Unsurprisingly, the more tickets and violations you have on your record, the higher your car insurance premium will typically be. It is worth noting that the type of ticket or violation could also impact the rate you receive. Having a couple speeding tickets on your record will usually do less damage to your premium than a DUI or reckless driving charge.

Claim History

Along with your driving history, the insurance company is also going to consider your auto insurance claims history. If you have a long history of auto claims – whether you filed, or it was filed against you – the insurance company is most likely going to raise your premium. If your insurance company has to pay out on a claim you filed, you should also expect your rate to increase. The more money insurance companies have paid on your behalf, typically the more they are going to charge you to be covered.

Credit History

Although it is often overlooked, your credit history may be an important factor when it comes to calculating your premium. On average, drivers with poor credit have a history of filing more claims than drivers with better credit – and these claims are often more expensive as well. While this may not be the case for your situation, this is just one more reason for you to work on building a good credit score. Rates will vary from company to company, so it is important to shop around while keeping these other factors in mind. The CommunityAmerica Insurance Agency can help determine the right coverage for you and help you shop around to find coverage options that fit your budget.
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Insurance products may be sold through CommunityAmerica Insurance Agency, LLC, a wholly owned subsidiary of CommunityAmerica CUSO One, LLC and a licensed insurance agency in Missouri and Kansas. Insurance products:


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