What Factors Are Considered for an Auto Insurance Quote?

Not every insurance policy was created equal, and it's no secret that insurance carriers collect massive amounts of data to evaluate the risk factors for individuals, businesses, vehicles, and other insurable assets. Here's a look at how many major auto insurance carriers calculate monthly premiums for potential policyholders.

Common Factors for Insurance Rates

Just like any other business, insurance companies work to keep their costs low to protect their profitability. Each time a policyholder files an auto insurance claim (for a major accident or car theft), it involves a sizeable payout. Insurers try to offset these costs by making sure they charge their clients more than they're paying out on claims. Though every insurance agency is different, some common factors they consider when giving someone an auto insurance quote include their:

• Driving history
• Vehicle make and model
• Credit history
• Accident claim history
• Marital status
• Gender

Each insurance agency has its own process for analyzing a driver's risk factors. Some are more conservative than others or prioritize specific data points, which can lead to a significant difference in prices for similar policies. That's why it's always a good idea to shop around when looking for auto insurance.

How Do Insurers Weigh These Factors?

The risk factors listed above tend to be the most important because they help insurers make an educated guess about the probability that a driver will be involved in a collision or will miss a payment. It's safe to assume that your driving history is going to have the biggest impact on your monthly premium. In fact, people who have been at fault in numerous accidents or charged with a DUI often have a hard time getting insured.

Ways to Help Lower Your Auto Insurance Premium

You can’t control every factor that affects how much you pay for auto insurance, but there are a few steps you can take to keep costs low:

• By driving carefully and not getting tickets, you can establish a history of being a safe driver.
• Cutting your spending, paying bills on time, and lowering your credit card debt will all raise your credit score.
• Look for independent insurance agents in your area because they focus on getting you the lowest rates rather than trying to sell you the products of one insurance carrier.

Insurance Lounge provides an innovative approach to finding affordable insurance policies for our clients nationwide. We’re an independent insurance agency that serves as a one-stop shop for all of your insurance needs. Though our Insurance Concierges make it easy to shop for policies online, we also have retail storefronts throughout Oregon. See how much you can save on auto insurance by getting a free quote today.