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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

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Reviewed byBrad Larsen
Licensed Auto Insurance Agent

UPDATED: Mar 13, 2020

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Whether a driver qualifies for an affordable car insurance rate or not depends on various historical and present-day factors. For instance, an insurance carrier may base part of its decision to insure a driver at a certain rate on the individual’s driving record. Find the right quotes for car insurance today with our FREE ZIP code search!

An insurer may also consider the type of car the person currently drives as well as the safety features the vehicle has when determining the individual’s insurance premium.

Because insurance carriers determine the premiums they charge drivers differently, it is important for a driver to request and compare multiple auto insurance quotes from several companies before entering into an insurance contract with a particular company. Start now with our FREE comparison search!

One insurance company may charge a higher premium if a driver’s credit history is considered poor, for example, while a competitor may not factor the person’s credit history or FICO score into its calculation of the individual’s auto insurance premium.

Historical Factors

Each insurance carrier calculates the premiums it charges for car insurance based on its own formula that is generally comprised of both historical and current factors.

Typical historical factors that a company may incorporate into its formula include a person’s driving record, credit score, and group affiliations.

Driving Record

Insurance carriers usually review a person’s driving record when deciding how much they will charge to insure the person’s vehicle. In general, an insurance company offers car insurance to people with better driving records for less money than it does to individuals with worse ones.

In other words, the longer a person operates a car without being involved in an accident or cited for a moving violation, the less the individual will have to pay for auto insurance coverage.

Credit Score

The Fair Credit Reporting act allows insurance companies to consider a driver’s credit history when determining how much to charge the individual to enter into a new auto insurance contract or renew an existing policy, although some states disallow the practice.

As a result, a driver’s FICO score may cause the person to pay between 20 percent and 50 percent more for coverage depending on the state in which he registers his car.

A driver’s FICO score is based on the following five factors:

  • Payment Record
  • Current Totals Owed to Creditors
  • Past Credit Use
  • Recently Established Credit Accounts
  • Kinds of Credit Outstanding

Generally speaking, the higher a driver’s FICO score is, the more responsible the person is with managing money and, according to some insurers, the less likely the driver will be to file an insurance claim in the event of a mishap involving the individual’s car.

Some insurance carriers will also charge a person with a low FICO score more for car insurance because of the industry belief that is it more costly to settle a claim on behalf of a driver with a poor credit history than it is to settle one involving a driver with a higher FICO score.

Group Affiliations

A driver may qualify for a more affordable auto insurance policy if the person has a history of belonging to a particular group or groups.

An insurance carrier may discount the premium it charges for coverage if a driver is affiliated with the following types of groups:

  • Alumni Associations
  • Financial Institutions, such as a specific credit union
  • Senior Citizen Organizations, such as AARP

Current Factors

In addition to certain historical factors, an insurance carrier may consider circumstances present in a driver’s life at the time the person requests a quote for insurance to calculate how much the company will charge the driver for coverage.

Finding an Affordable Car Insurance Rate

The current factors an insurer may examine include a person’s other insurance policies, the number and types of vehicles the person is attempting to insure, the protective devices attached to the person’s car, and the amount of coverage the driver is attempting to secure.

Other Insurance Policies

If an insurance company offers what is referred to as a “multiple policy discount,” a driver may qualify for affordable auto insurance coverage if the person holds more than one insurance policy with the carrier.

A carrier may discount the premium it charges a person for car insurance if the driver has one or more of the following other types of insurance policies with the insurance company:

  • Homeowners Insurance
  • Renters Insurance
  • Life Insurance
  • Health Insurance

Number and Types of Vehicles

A driver may qualify for more affordable auto insurance coverage if the person insures more than one vehicle with the same insurance carrier. If a driver insures more than one automobile with an insurance company, the company may reduce the premium attached to the person’s car insurance policy, for example.

An insurance carrier may also discount a driver’s auto insurance premium if the person insures other types of personal vehicles with the carrier, such as the following:

  • All-Terrain Vehicle
  • Motorcycle
  • Snowmobile
  • Camper or Trailer
  • Recreational Vehicle
  • Motorhome

A driver may qualify for affordable auto insurance coverage based on the type of car the person currently owns as well.

An insurance company may charge a driver a lower premium if the person drives a family sedan instead of a sports car capable of reaching very high, comparative rates of speed, for example, because the carrier would view the slower car as less of an insurance risk.

Protective Devices

An insurer may discount the premium a person must pay for car insurance if the driver’s car has certain devices, such as anti-lock brakes and air bags, that protect the people in the person’s vehicle from injury in the event an accident occurs.

How to Qualify for an Affordable Car Insurance Rate

An insurance carrier may also discount a driver’s premium if the person’s car has devices that will protect the vehicle from being stolen, such as a security system or demobilizing mechanism.

Amount of Coverage

In general, an insurance carrier will charge a higher premium for policies that include higher levels of coverage. A driver may be able to qualify for affordable insurance by agreeing to lower levels of coverage a result.

A driver must work with an experience insurance agent to ensure the amounts of coverage included in the driver’s policy remain high enough to satisfy the requirements of the state where the person intends to register a vehicle, however.

An insurance carrier may charge a lower premium if a driver agrees to include a higher deductible in a car insurance policy as well. A carrier typically charges a higher premium for policies that include low deductibles.

Whether or not a driver qualifies for an affordable car insurance rate depends on both historical and current factors, some of which are beyond a driver’s immediate control, others of which are contingent upon choices the person makes when attempting to secure or renew an insurance policy.

If a driver has a low credit score, for instance, it may take time for the score to reach a height that will convince an insurance carrier to offer the person a lower car insurance premium. Compare FREE car insurance quotes today with our ZIP code search!

If, on the other hand, a driver agrees to reduce the levels of coverage and increase the deductible included in a car insurance policy, an insurance company may reduce the premium attached to the individual’s policy. See if you can save on car insurance with our FREE quote comparison tool!

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