Everyone’s car insurance rates are different. This is because car insurance companies assess every risk factor, taking in all the possibilities that could either increase or decrease the chances of the policyholder making an insurance claim. The most simple, watered-down explanation for different insurance rates would be this; if the policyholder is more likely to make an auto insurance claim, the insurance company will charge more. If the chances of a claim are low, then the prices would be low too. 

So how do you find out what your auto insurance rates would be? This is where the car insurance calculator comes in. Auto insurance rate calculators are online programs where you can estimate how much your auto insurance will cost you. This article will explain everything you need to know about a car insurance calculator, how it works, what factors it considers, and much more. 

What is Car Insurance Calculator

Back in the days when the internet was not that powerful, and smartphones were a bit less common, the insurance company would go through a very long and tedious process of getting your insurance quote. This included pulling up files, analyzing the person’s financial status, driving record, etc. A lot went into the generation of insurance quotes. 

But with the strengthening of the internet and the necessity of insurance companies to be on the internet have made car insurance calculators possible. These calculators are an online program that works just like an insurance agent calculating the insurance rates for you. 

All you need to do is fill in the details about yourself, your car, and a few more things and give them contact information, which could either be your number or email ID. After all of this is done, within minutes or even seconds, you get your insurance quote.

Do note that these calculators are not precise in calculating the rates. Other factors can affect the price of your insurance rates. While it is not precise, it is very close to the actual rates if you put in the right information. So how does it work?

How Do Insurance Calculators Work? 

Car insurance calculators take in a lot of details about you and your car, then look at the depreciation of the vehicle, actual cash value, and a lot of other factors to determine the estimated cost of your auto insurance. Let’s take a look at all the different factors that are usually considered and how it affects your auto insurance rates. 

Driving Record 

Every driver has a different driving record. All your tickets, traffic violations, accidents, etc are pulled up with your CLUE record. Any past violations going as long as seven years will be considered in determining your insurance rates. Needless to say, people with a poor driving record will have higher insurance rates because they are more likely to be involved in an accident and make a claim. If you are getting higher insurance rates, your driving record could be a factor. 

Vehicle Make and Age

Your vehicle makes a lot of difference when it comes to the insurance price. Expensive, large cars need expensive insurance coverage and hence, companies charge more. Small, commuting vehicles will get you cheaper insurance policies. 

It is better to get smaller, cheaper cars instead of expensive large ones if you want to save some money on auto insurance. Also, you need to choose the best insurance company that suits your needs with their coverage to save some more money. 

Credit Score 

Bet you did not expect to see your credit score considered when calculating your auto insurance rates, did you? After all, it makes no sense, right? Well, if you are in California (and some other states), you’d be happy to know that your credit score cannot impact your insurance rates. 

But for the people who are living in the rest of the US, be ready to pay more if you have a poor credit score. This is because statistically, people with poor credit scores are more likely to miss insurance premium payments, and to offset the loss the company will have to take if there’s a failed premium payment.

Parking Area

Where you keep your car parked impacts the price of your collision and comprehensive insurance policy. If the parking is in an area with higher rates of crime, theft, carjacking, accidents, etc, then you will be charged more for auto insurance. There’s nothing you can do about it other than change your parking location.

One more thing that can help you reduce your insurance rates is by installing safety and security features. For example, if your car has ABS, an anti-theft alarm, and other features that can prevent accidents, theft, or damage, your insurance rates will go down.

Past Insurance Claims 

If you have had other auto insurance policies before and you’ve made a claim against it, no matter which company you choose, you’ll have to pay more. This is because the moment you make an insurance claim, no matter how trivial it is, your insurance rates go up. This is why it is better to prevent unnecessary insurance claims. 

Age and Gender 

Age and gender are also deciding factors for auto insurance rates and are used in insurance calculators. People who are younger than 25 tend to have less driving experience. Hence, they are charged more. People older than that and with a good driving experience will be charged less.

Apart from age, your gender also decides how much you’ll be paying. Statistically, women are less likely to get in an accident than men, hence they are charged less than men. 

So these were the factors that a car insurance calculator takes in while providing you an insurance quote.