Understanding Car Insurance Rates: Rating Factors that Insurance Companies Use

Car insurance rates can vary drastically from one company to another. There are many factors that go into an insured's rate quote. Insurance companies won't tell you exactly what affects policy quotes, but there are standard rating tools that affect car insurance rate discounts.

Car insurance rates take into account several things: driving record, the type of auto insured, address, age and credit are the rating factors most people know. Did you know that having a gap in your coverage for even a day can cause car insurance rates to climb hundreds of dollars?

Having too many hit and run accidents, though not at fault accidents, causes rates to go up.

Life choices can affect car insurance rates. Marriage, buying a home, not smoking and going to college can lower policy costs. Paying in full can lower car insurance rates significantly. When your car is garaged it can lower or raise rates depending on the crime rates in the neighborhood.

When talking to the insurance agent, always ask if there are any discounts and answer every question. One answer might trigger a discount that you, and the agent, are unaware exists.

Every company's rating systems have to be approved by the State Department of Insurance and are public information. Major companies use those published rating factors to quote what competitors would charge.

When shopping, it is important to contact several companies from the big ones to the smaller companies. One might offer discounts another won't.

Car insurance rates are based on factors you can control (like driving records or credit history) and some you can't (like hit and run accidents or age). Check car insurance rates before buying a car or switching companies to see how much it will cost. Knowing what factors affect your car insurance rates can save you money on the auto policy and put the money back into your pocket.