Driver history is just one factor; there are many others.

Provided by Marc Aarons

Your auto insurance premium is based on more than your driving history. The amount you pay for auto insurance is determined by a complicated algorithm that takes many factors into consideration. Your driving history is just one variable used to calculate your rate. Read on to learn more about what auto insurance carriers look at when they determine your premium.

Age is a key factor. Younger drivers are considered the riskiest to insure due to their lack of experience behind the wheel. Most insurance carriers consider a “young driver” to be someone under age 25. Drivers older than 25 typically pose less risk, so your car insurance premiums may drop as you get older.¹

Your location makes a difference. Your location is one of the biggest factors in determining your car insurance premium. Insurance carriers use data from more than just your state and county; they often use information from your specific zip code. Insurance providers don’t just look at whether you live in an urban or rural area, but also at the motor vehicle theft and crime rate statistics where you live and park your vehicle.¹

 The car you drive may also factor into the calculation. There is a direct correlation between the cost of the vehicle you drive and your car insurance rates. If your car were damaged or totaled in an accident, it would cost the insurance company more to replace it. But other factors, like if the make and model of your car is a frequent target of thieves or prone to passenger damage, will also cost more. Vehicles with a high safety rating, lots of safety features, and theft-deterrent systems, however, may help offset these costs and lower your rate.²

 Married couples typically save more on their premiums. Being married can be a plus when it comes to auto insurance rates. Some insurers think that married people lead less-risky lives. Married couples save a national average of 6% on car insurance, but some states, it may save them as much as 12.7%.^1,2

 Primary vehicle use. The 2020 State of Auto Insurance Report, published on Zebra.com, says that the typical insured driver has a personal use policy, which means that their car is used to commute to work and run personal errands. But if you’re using your vehicle for business and to drive between clients, you may want to consider a business auto insurance policy to make sure you have adequate coverage.³

 Insurance carriers run these variables through their own refined algorithms. Car insurance companies have different ways of calculating the cost of insurance, which is why rates may vary so much from carrier to carrier. You may be able to save significantly by comparing auto policies and shopping around.

Marc Aarons may be reached at (714) 887-8000 or marc@ocmoneymanagers.com

_{MMI Disclosure This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The ^{publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.}}

^{This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.}

^Citations.

^{1 – CarandDriver.com, March 11, 2020}

^{2 – TheZebra.com, April 22, 2020}

^{3 – TheZebra.com, June 2020}