When pricing their new car insurance, insurers will consider a wide range of variables. The market is competitive, so they want to hold premiums as low as possible, but at the same time, they are in business to make a profit, so they need to charge you enough to cover their overall risk.
For these reasons, insurers will look at the statistics, and try to identify any factor which influences the likelihood of you making a claim, or the size of the claim.
This is why the cost of the vehicle is a major consideration, along with obvious variables like your driving record, and the ages of the regular drivers of the vehicle. If you vehicle has safety features, which make a personal injury claim less likely, or reduce the likely size of a claim, it will reduce your new car insurance premium accordingly. And if your new vehicle is a make or model which is particularly likely to be stolen or damaged, you will, unfortunately, be paying a whole lot more for your new auto insurance.
Some insurers consider credit score, hopefully on the basis of statistics, although it is not immediately obvious that there is a direct connection.
There are also factors which you can control to some extent. Many insurers will allow you to choose the amount of your deductible, or excess – this is the contribution payment you make when you make a claim. Some insurers charge you the deductible for every claim, while others will only charge you if you are at fault. The higher the deductible, the less the claim costs the insurer, so choosing a higher deductible can reduce your new car insurance premium.
Two bills have been introduced that will be a solution. House Bill 2513 and Senate Bill 6252 would ban the practice of using a person’s credit history, education or income to set insurance rates.