What factors influence your car insurance rates?

car insurance rates

When you’re heading up a family, you’re probably always looking for ways to save money. One way you might be able to save money is by shopping around and comparing car insurance rates, but many people don’t know where to start. A good starting point to cut your car insurance premiums is to first understand exactly what plays a role in these costs.

Then, once you have a better idea of how personal factors may influence your rates, it becomes easier to do some money-saving shopping on different policy options.

The following are key factors that affect car insurance rates.

Having a Child

Some new parents wonder if having a child will influence the cost of their car insurance. They may wonder because babies might seem like a driving distraction that could raise rates, but in reality, having a new baby shouldn’t affect your rates, at least not directly.

There could be indirect effects, however. For example, maybe you change jobs or move after having a baby. In those instances, your rates could potentially go up or down, which will be detailed a bit more below.

A family-status issue that does impact your rates directly is your marital status. The majority of automobile insurance companies have lower rates for married drivers than for single drivers.

Where You Live

As mentioned, if you’re planning a move after expanding your family, this can factor in your car insurance costs directly. Location is one of the most pertinent factors in determining insurance costs. This includes not just a state and city, but even the neighborhood where you live. For example, your insurance company probably already knows the crime rates in your neighborhood, the weather patterns that could affect risk, and the number of claims coming from your local area.

You can enter your post code into different search tools online to get a better idea of what the rates are, on average, where you live.

Type of Policy and Coverage

The amount of coverage and the type of policy you have are important to what you pay. The recommendation is often that you have 100/300/100 in liability coverage. That means you have £100,000 per person and £300,000 per accident for bodily liability, as well as £100,000 for property damage liability.

You may also want collision and comprehensive insurance.

Credit Score

Did you know your credit score affects how much you pay for car insurance? Almost all companies integrate your credit score into the algorithm they use to determine how much you’ll pay.

What’s the reason?

Insurance companies feel that people who have lower credit scores may be more of a risk than people with good credit, so they charge them more.

According to research from CarInsurance.com, drivers with bad credit pay 71% more on average for insurance than drivers with good credit—that amounts to about £1,000 more each year.


For the most part, the younger you are, the more you’re likely to pay for car insurance. That’s because younger drivers tend to be riskier due to factors like inexperience and lack of maturity. Drivers between the ages of 30 and 69 are statistically less likely to be in accidents.

Throughout your life, your rates will go down, although they then go back up when you’re older. For example, your rates may go down as much as 20% when you turn 25, but once you’re older than age 69, they may start going up again.

Your Job

There are some occupations that are seen as higher-risk and others that are seen as lower-risk. However, there is a push among advocacy groups to stop the ability of insurance companies to decide rates based on your career.

Finally, a few other factors:

  • Of course, your driving record is a big one. Depending on how bad your record is, you may even need to find an insurance company specializing in high-risk drivers.
  • Homeownership can mean you get a discount on the cost of car insurance, even if you don’t bundle your policies.
  • The less you drive, the less you’ll pay for insurance in many cases.

Even where you park your car can play a role. If you have a home with a garage and that’s where you park, then you might see lower rates because insurance companies see this as less risky than parking in a lot or a street, for example.

Did you know the above factors influence your car insurance rates? Do share in a comment below.

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