7 Ways Your Household Affects Your Auto Insurance Rates

Your household, which includes your house plus its occupants, has a significant effect on your auto insurance rates. Below are seven ways in which your household affects your rates. 

1. Homeownership 

Homeowners tend to pay lower rates than renters do. Insurance companies view homeowners as more reliable and less likely to file claims than renters. If you are a homeowner, you can enjoy even better rates if you purchase your home and car insurance from the same company. Many insurance companies give discounts to multiple policyholders. 

2. Neighborhood 

Your neighborhood determines the risks your car face on a daily basis. For example, your neighborhood determines: 

• The risk that you might lose the car via theft 
• The risk that someone might vandalize your car 
• The risk of a car accident, which depends on the population and roads in your area 

For example, if your neighborhood has well-designed and safe roads, your coverage rates may be lower than another driver who lives near a dangerous highway with frequent accidents. 

3. Parking 

If you have comprehensive insurance, then your parking place will also affect your rates. Parking location determines:

• The risk of theft 
• The risk of vandalism 
• The risk of accident (others might scrape your car) 
• The risk of damage due to a weather-related issue, such as a fallen tree 

Examples of secure parking locations include locked garage compounds (a fenced area with a gate). Insurance companies often consider street parking as more dangerous.  

4. Credit Rating 

Insurance companies use statistics to determine future insurance rates. According to thezebra.com, available data show that motorists with bad credit are more likely to file claims than those with good credit. Thus, you may enjoy relatively low rates if you have stellar credit scores. 

5. Drivers 

The drivers in your household are the biggest determinants of your car insurance rates. Discover the specific aspects of the drivers that insurance companies consider: 

• Number: Few drivers mean few risks, so your rates may be lower than a similar household with more drivers. 
• Age: Inexperienced and aging drivers both increase rates, but young and middle-aged drivers often enjoy good rates. 
• Driving history: A clean driving history translates to inexpensive rates. 
• Driving courses: Some companies give discounts to drivers who take defensive driving classes. 
• Gender: For drivers under the age of 25, men tend to pay higher rates than women. 
• School performance: For drivers in school, good performance may attract discounts. 

You may be able to exclude dangerous drivers from your policy so that they don't drive up your rates. 

6. Marital Status 

Your marital status may have both a direct and indirect impact on your insurance rates. For example: 

• Many married people have homes, and homeownership attracts lower rates. 
• Married people file fewer claims than unmarried people do. 
• Married people may be more financially stable than unmarried people. 

The effects may vary depending on whether you are divorced, single (never married), or widowed. For example, the difference between married and divorced drivers is not as huge as that between single and married people. 

7. Babies 

Having a baby won't have a direct effect on your auto insurance rates, but you may experience indirect effects. Below are some of these indirect effects: 

• Your rates may go down if you upgrade to a safer car. 
• Your rates may go down if you reduce your annual mileage. 
• Your rates may go down if you move to a safer neighborhood. 
• Your rates may go down if you improve your driving style. 

The good news is that most of the above factors are under your control. 

Now that you know how your household affects your car insurance, you can manage the factors to enjoy inexpensive rates. Irrespective of your household, Illinois Insurance Center can help you shop for the most appropriate coverage at affordable rates. Contact us today for a quote, and we will be glad to guide you as you shop for auto insurance.