What Factors Affect an Insurance Quote

You did it. You took the plunge and bought a new car. Naturally, you’re itching to get out on the open road, but before you can even think about taking it for a spin, you have to secure auto insurance, and that can be a headache.

The first step is, of course, getting a quote—an insurance company’s estimation as to what your monthly rate would be were you to purchase that insurance. To make that estimate (really, a guesstimation based on a number of factors), insurers will ask you some questions to determine how much they’d have to shell out if you get into an accident. And there are seemingly millions of options when it comes to car insurance, and some of them have unique or unexpected requirements.

But when it comes down to it, there are five things that pretty much all auto insurance companies will want to know before giving a quote.

5 considerations that will affect an auto insurance quote

1.   Your zip code

Before determining the risk they’re going to take on by insuring you, auto insurance companies need to know your zip code. Actually, it doesn’t really matter what your zip code is, they just want to know where your car will be parked overnight. People who live and park their cars in urban environments tend to pay more in car insurance than those in suburban and rural areas, and that’s because cars parked in cities are more likely to be stolen or damaged due to vandalism. Beyond vandalism, weather factors, which can be wildly different in different parts of the same state, affect what a company will quote you. If you live somewhere that floods often, you’re a bigger risk for the insurance company.

2.   Your state

I know, I know, we already talked about your zip code—but state requirements are actually a different factor. “Car insurance” is actually kind of a blanket term that can encompass multiple different kinds of insurance: liability, personal injury protection, collision insurance, and so on. While 49 of the 50 states require “car insurance,” the minimum amount required and type varies from state to state. This is obviously a foundational factor in how much an insurance company estimates your rate will be, and it’s also why even national auto insurance companies don’t necessarily serve all states.

3.   Your age

Insurance companies have analyzed decades worth of statistics about traffic accidents and incidents of unsafe driving, and they’re literally constantly updating it with real-time data. The evidence says that generally speaking, folks in their 60s are the safest, most careful drivers. Because of that, it’s less of a risk to insure them, so they may have lower quotes. Generalizing this way may seem unfair, but anyone who has ever taught a teen how to drive knows they can be scary.

4.   Your gender 

Yep. Another demographic factor you can’t control. Research bears out that, very broadly speaking, women are generally less likely to be involved in car accidents. Of course, there’s a wide spectrum of what constitutes an “accident”—all the way from fatal DUIs to minor fender-benders—and some incidents are more likely to involve men while others are more likely to involve women. Different insurance companies will have different standards and analyses of traffic data.

However, there are some states that ban the consideration of gender in determining insurance rates. Those states are:

●      California

●      Hawaii

●      Massachusetts

●      Michigan

●      North Carolina

●      Pennsylvania

5.   The make and model of your car

You may have heard the rumor that it’s more expensive to insure a red car than any other color, because they’re more likely to be pulled over for speeding. If you hadn’t already guessed, this is nothing more than an urban legend. But while the color of your car won’t affect your insurance quote, the make and model likely will. Different brands (make) and types (model) of cars have different features; while some features are likely to drive the cost of auto insurance down, like airbags or antilock brakes, others may drive the cost up. No, not red paint. But alluring bells and whistles could make a car more likely to be stolen. Insurance companies consider all of the above when issuing a quote.

At the end of the day, the factor that has the most impact on your quote isn’t really about you: It’s about what insurance company you choose. To learn about how AAA determines its quotes, click here.