Many factors dictate insurance costs, starting with your address. Costs differ markedly by state and locality.
“People don’t consider auto insurance costs when they move, but it does make a difference,” says Jane Jansen, manager of the Auto Accident Compensation Project at the University of Wisconsin, Milwaukee. For example, insuring a four-door Ford Explorer in Los Angeles can cost 50 percent more than what you’d pay to insure that vehicle in Milwaukee. Rates can even differ between neighborhoods within a city, depending on a variety of factors, including frequency of car thefts and break-ins. Also, if residents of a certain city are more likely to sue, rates will be higher there.
Age, marital status and frequency of driving also affect insurance costs. In general, the younger you are the higher the rate, and the older you are the less you pay. Adjustments made by State Farm, the nation’s largest auto insurance carrier, are typical:
Married drivers age 25 to 50 get the basic adult rate. Singles must wait until age 30. Beyond 50, drivers get a 10 percent cut. But for drivers under 25, rates climb. The highest rates are for single males under 21 who own their own car and drive it most of the time.
Unfortunately, adding children to your policy can send rates soaring. And if you or any driver on your policy has an accident or receives a ticket for a moving violation, your carrier can issue a surcharge or even cancel your coverage. A driver classified as high-risk may pay rates three times those of the average driver.
Then there’s your car. Insurance carriers rate cars first on value: The more expensive the car, the more costly collision and comprehensive insurance will be. Carriers also charge more for car models most often involved in crashes. And rates are higher for two-door coupes and other sporty cars that insurance carriers expect will be driven fast. That’s why a $14,000 sports car can cost more to insure than a large $20,000 sedan that’s considered safe and cheaper to fix.
