Five factors that enable you to vary your auto insurance rates


What goes into the making of an auto insurance quote? We all know our provider “crunches the numbers,” but what “numbers” are they crunching? What factors are involved that determine the rates for auto insurance? There are several routine “standards” your carrier will assess when determining what you will pay for auto insurance.

Where you live

Where you live is a key factor in determining your auto insurance rates. If you live in a largely populated area (i.e., “metropolis”), chances are you will be driving on freeways and highways, surrounded by other drivers. The more drivers you share the road with, the higher your chances of having an accident. If you live in the suburb of a large city instead of within city limits, make that clear to your insurance company. Chances are if you live in a small city or town and do not do a lot of out-of-state driving, your insurance rates should be lower.

Miles Driven

Do you drive the standard 12,000 – 15,000 miles per year, or do you live in your vehicle? The amount of time spent on the road is just as important as where you do your driving. If you put 30,000 miles per year on your vehicle, your insurance company may consider you a greater risk. If your mileage decreases for any reason, notify your carrier and ask to have your policy re-evaluated. This will help you save a lot of money on your car insurance premium.

Your Occupation

Do you drive to and from the grocery store once a week, or are you a salesperson in the car 10 hours per day? Your occupation plays a big role in assessing your auto insurance rates. If you drive from meeting to meeting, you’re on the road more often, increasing your chances of an accident.

If you have access to a company vehicle covered under your employer’s plan, tell your insurance company, and take advantage of that vehicle as much as possible. Give them the name of your company’s insurance carrier, and make it clear you utilize that vehicle instead of your own for work. Do you store items in your vehicle that make it more attractable for a break-in? Are you a pharmaceutical rep storing licensed medications in your trunk? Your occupation alone could make your vehicle a target for break-ins. Bottom line, the less time you spend in your personal vehicle doing your job, the less risky you are considered by your provider.

Hazmat/Bio-hazardous Materials

If you do use your personal vehicle for work, what materials are you carrying? Do you drive around all day dropping off brochures, or are do you work for an organ transplant service? The materials you carry for your job can impact – and often supersede – the risk involved with your occupation. If you carry bio-hazardous materials such as human blood or waste, or work with cleaning chemicals, your risk factor has skyrocketed.

If your vehicle gets rear-ended while carrying hazardous materials, chances are greater of a chemical spill or incident, which could create more problems and clean-up after the fact. Always be up-front with your insurance carrier about the materials you store in your vehicle. While disclosing this information may increase your rates, not disclosing it could make you eligible for cancellation.