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5 Factors That Affect Car Insurance Rates

Close up to a businessman hands. One holds a toy car; the other holds a bunch of coins.

Multiple factors are considered by auto insurers when it comes to your rates. Some are completely out of your control, like your age or gender. Other factors though, like how you drive and even where you park your car can be considerations when deciding what to charge. Here, we break down the five main factors that can affect your car insurance rates.

1. Who You Are

Things you can’t control, like your age and gender, can play big roles in the cost of your car insurance. While you may not be able to change it, it’s good to know what to expect.


According to the Insurance Institute for Highway Safety (IIHS), teen drivers have crash rates nearly four times those of drivers 20 and older per mile driven. That’s why teenagers have the most expensive insurance premiums. Luckily, as we age, rates decrease, hitting the lowest point around mid-fifties.


Many more men than women die each year in motor vehicle crashes, according to IIHS. “Men typically drive more miles than women and more often engage in risky driving practices including not using safety belts, driving while impaired by alcohol, and speeding.” That’s why many states charge higher rates for younger men, while some states will charge higher rates for older women. However, lawmakers in Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania, and California, have prohibited gender discrimination in automobile insurance rates in those states.

2. Where You Are

Where you live has a major impact on your auto insurance rates. Each state has its own laws surrounding what kind of insurance drivers must have, as well as rules restricting how insurers decide what to charge. Michigan, for example, has notoriously high rates. This is because every policy must include unlimited medical coverage, also known as personal injury protection or PIP, for auto-accident victims.

Insurance rates are higher in areas with more drivers. Therefore, your rates may be different, not just by which state you are in, but which zip code as well. In fact, where you park your car (on the street or in a secure garage) and anti-theft features may impact the bottom line as well, according to the Insurance Information Institute.

3. How You Drive

Insurers want to insure drivers who are careful and follow the rules of the road. The more accidents, traffic tickets, and other serious violations on your record, the higher you are likely to pay.


When you make a claim against your insurance policy above a specific amount due to an incident that is primarily your fault, an insurer will increase your premium by a certain percentage. Included in your claims history is any insurance claim you file — and any claim filed against you.

Traffic Tickets

From a seatbelt infraction to reckless driving, all kinds of traffic citations can have an effect on your insurance rates. Most will increase your rates about 25 percent. However, a DUI or DWI can mean a nonrenewal from some insurance companies.

4. What You Drive

When looking at the car you drive, insurers are considering things like the likelihood of theft, the cost of repairs, its engine size, the overall safety record of the car, and how much the car cost.

Some cars, like sports cars and convertibles, are going to be priced higher than something bigger and sturdier. The cheapest cars to insure are the Subaru Outback and Honda CR-V, both of which are top safety picks, according to IIHS.

Whether a car is new or used doesn’t make a difference on the surface. It’s more about how expensive new cars can be vs. how safe a used car is. Be sure to check your car’s Blue Book value each year to see its current price on the market. You can talk to your insurance agent and possibly get a lower price on your premium depending on the updated value of your vehicle.

5. How You’re Covered

Which company you choose to buy auto insurance from makes a big difference, so it’s important to do your research. The same company will offer different peoples different rates and the cheapest company in one state can be the most expensive in another.

Another factor that could increase your premiums is if a policy lapsed and you had a gap in insurance coverage. Always avoid lapses in insurance, as it is often more expensive in the long run.

Finally, and most obviously, the coverage and deductibles you choose will make a difference in the cost of your car insurance. That’s why you should always ask to see if you qualify for any discounts, do your research, and compare rates.

Do you have more questions? Our insurance experts at Freeway Insurance can help! Get a free car insurance quote today online, over the phone or at one of our offices near you.

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