How Your Personal Life Affects Your Car Insurance Rate

Wondering why you pay what you do for car insurance? Check out these five factors that could affect your rate.

By Sarah Simmons

When it comes to getting an auto insurance policy, things can get surprisingly personal.

From your career and marital status to your address and car model, auto insurance agencies are determined to get the inside scoop on you.

Why are these personal tidbits so important?

Because, who you are and what you do has a direct affect on your auto insurance rate.

Keep reading to learn about some personal factors that affect your auto insurance rate…

Factor #1 – Credit Score

Being punctual about paying your bills on time doesn’t just help you avoid those frustrating late fees; in most states, it can also help you avoid a costly auto insurance rate.

How so? Because your credit score is one factor that determines your insurance rate.

“There is a strong correlation between credit and accidents,” says Susan E. Voss, president of the National Association of Insurance Commissioners (NAIC).

 This means that if your credit score is low, your auto insurer will view you as more likely to file a claim, and your insurance rate will likely be higher. Likewise, if your credit score is high, you’re seen as more responsible and will likely have a lower rate.

So if your credit score is low, consider taking steps to improve it. If your credit score is high, keep it up.

Factor #2 – Gender

Thought your parents were the only ones who cared about your X and Y chromosomes? Oddly enough, your auto insurer cares too.

According to NAIC, auto insurers use gender as a factor to determine your auto insurance rate because statistics show that men and women have different driving records.

And while society has labeled women with the stereotype of being terrible drivers, statistics paint another picture. According to a 2009 study conducted by Quality Planning, an auto insurance analytics company, males are at least 50 percent more likely to be cited for reckless driving than females.

As a result, men will likely pay a higher premium than women.

Factor #3 – Occupation

 If you carry the title of engineer, scientist, or mathematician, consider yourself lucky because your career can offer more than just a nice paycheck.

 “Many companies offer discounts to people with certain degrees, such as engineers, scientists, and mathematicians,” according to J.D. Power and Associates, a marketing information service group. “Historically people in these professions have been less likely to get in accidents.”

 J.D. Power also notes that certified teachers and people in the military can also receive discounts on their auto insurance rate.

 In this way, if your occupational group has statistically proven to be responsible drivers, you’ll likely get a discount. However, if your group has a history of one too many fender benders, your rate may take a hike in price.

Factor #4 – Marital Status

 For better or worse, your marital status also matters to auto insurers.

“Married people show lower rates of claim,” according to NAIC, and as a result, generally have lower auto insurance rates. Insurance companies give discounts to those in marital bliss because claims histories show they’re less likely to file claims than single people.

However, it’s important to remember that once you get married, you share everything. This includes your spouse’s driving record.

NAIC advises that “if your spouse has a poor driving record, this could adversely affect your premiums.”

As you can see, even when it comes to insurance, being married has its ups and downs.

Factor #5 – Age

“With age comes wisdom” isn’t just a saying; it’s a fact insurers consider when determining your auto insurance rate.

“In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car,” according to the Insurance Information Institute, an organization focused on improving public understanding of insurance.

The Insurance Information Institute also notes that many drivers over 55 can qualify for a discount if they complete an accident prevention course.

When it comes to auto insurance, it’s important to remember that there are a number of surprising factors that can affect your rate. So, make sure to keep up-to-date with the industry by doing research and shopping around to get the best rate possible.