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What Determines Auto Insurance Rates?


Each state requires that drivers carry auto insurance on all vehicles that they drive. Sometimes, auto insurance can be quite affordable and other times it can be downright expensive. In fact, you can be driving a 10-year-old compact car paying twice what your next-door neighbor pays to insure his brand-new 4X4, so what gives?

If you’re like most licensed drivers in South Carolina, you know that a speeding ticket or a driving under the influence (DUI) conviction will cause your auto insurance premiums to increase, but are you aware that there are several other factors that determine a person’s auto insurance rates? The following factors can directly determine how much you pay in auto insurance premiums each year:

Your age. Statistically, young people cause the lion’s share of car accidents simply due to driver inexperience. Because of this, teenagers and people under the age of 25 usually pay higher insurance premiums than people over the age of 25.

Your gender. Males get more moving violations and cause more accidents than females, so they tend to pay higher insurance premiums as a result.

Your driving record. If you are ticketed for speeding, running a red light or a stop sign, or DUI, these moving violations will add points to your driving record, placing you in the “high risk driver” category. As a high-risk driver, you will pay higher insurance premiums.

Where you live. Drivers who live in rural areas pay less in auto insurance than drivers who live in suburban areas or the city. Why? Because, there are more thefts and vandalisms in bigger cities. So, if you move from a small town to a big town, your auto insurance premiums can increase significantly just based off of your new zip code.

The car you drive. There’s a big difference if you drive a $50,000 vehicle compared to a $1,500 one. It costs a lot more to repair or replace the $50,000 car if it’s damaged or totaled in a crash, so it will cost more to insure than a much older vehicle that’s passed its prime.

Where you park your car. You may get an insurance discount if you park your car in a garage versus parking it on the street. You may also receive a discount if you have anti-theft devices, such as an alarm installed in your vehicle.

The annual miles you put on your car. Ever had an insurance agent casually ask you, “So, how many miles do you drive each year?” Well, the agent asked because your answer could affect your insurance premiums. You see, the more miles you drive annually, the greater the risk of being in a crash. If you log a lot of miles on your car each year driving to and from work, it could hurt your insurance premiums.

Your credit score. Most insurance companies use people’s credit scores to determine auto insurance rates because they believe that the lower the credit score, the more likely someone is to file an insurance claim. To learn more about how credit affects insurance premiums, check out this Consumer Reports article.

Related: How Long Do I Have to File a Personal Injury Claim in South Carolina?

We hope this post helped you better understand what determines your auto insurance rates. To file a car accident claim in Columbia, contact us today.

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