There’s nothing simple about pricing insurance policies. Companies use a huge variety of factors to create a formula that allows them to price each policy individually–and some of those factors have generated a lot of controversy in recent years. When it comes down to it, there are statistical reasons behind each of these choices; basically, one group is simply more likely to get into an accident than others. Wondering what everyone gets all upset about? These are a few of the top reasons. Unfortunately, these are also factors that drivers can’t really do anything to change.
1. Your Gender
All other factors being equal, men pretty much always pay more for car insurance. That’s because they tend to drive more miles than women; they also tend to take more risks and get into more accidents, according to the majority of studies out there. Because men are statistically more likely to file a claim, they pay more out-of-pocket each month for their insurance policies.
2. Your Marital Status
Married? You probably pay less for car insurance than your single counterparts. The data shows that married people–both men and women–tend to take fewer risks and get into fewer accidents than singles. That said, lowering your insurance rate probably isn’t a great reason to tie the knot, so this is one of those factors that’s pretty much set in stone–for now.
3. Your Insurance Credit Score
Three states (Hawaii, California, and Massachusetts) all prohibit using this score to price insurance rates, but it’s still an option in Kansas and other states. Your insurance credit score is a three-digit number based on your payment history (for all open accounts, not just your insurance), the amount of available credit you’re using, how many claims you’ve filed recently, and a few other factors.
4. The Neighborhood Where You Live
Neighborhoods and towns high in crime tend to also be higher in car insurance expenses–particularly for comprehensive auto insurance coverage. Riskier areas come with higher risk of vandalism, burglary, or theft of your vehicle–and thus a greater risk to insurance companies to insure. Some have argued that living on the right or wrong side of the street shouldn’t impact car insurance rates, but so far this factor still stands.
5. Your Age
Ageism is a thing, and it’s a particularly real thing when it comes to auto insurance. The truth is, auto insurance companies aren’t trying to be ageist when they price their policies; they’re just trying to give lower-risk individuals a price break. That means individuals roughly between the ages of 25-50 pay significantly less than teenagers or the elderly.
Not every insurance company uses all of these factors to calculate their rates, but it makes sense to shop around to see where you can get the best deal no matter how young, old, male, or single you are. Give us a call or stop by one of our offices at Integrity Insurance, and we’ll talk to you about your concerns and your insurance needs so we can get you a quote today!
