5 Unexpected Factors That Affect Car Insurance Rates

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Car insurance rates can be affected by some unexpected factors, such as having a child. (Photo: @crystalmariesing via Twenty20)
Car insurance rates rise and fall due to a variety of well-known factors, including your driving record, your age, and the type of vehicle you drive. Surprisingly, your education level, profession, and customer loyalty can also play a part in the car insurance rates you pay.
But you may not be familiar with some of the lesser-known factors that can affect your car insurance rates. Here are some unexpected factors that might be costing you extra on your car insurance.

Your Education Level

Some companies base your car insurance rates on your level of education. For example, drivers who did not finish high school can expect to pay over $3,300 more on average for car insurance over the course of their lifetime compared to college graduates.

Your Profession

Auto insurance companies also make a connection between your job and your car insurance rates. If you expect to find yourself on the road a lot as a result of your profession, expect to pay more for car insurance. This includes delivery drivers, journalists, and other workers who travel often. Other professionals, such as emergency service personnel, members of the clergy, and insurance underwriters can expect to pay less, as many car insurance companies see them as more cautious drivers.
High-risk jobs include those that require more work and longer hours, resulting in higher stress levels and a lack of sleep. This contributes to a higher rate of accidents among drivers who hold high-risk jobs. Some drivers in these high-risk occupations tend to pay more for car insurance:
  • Architects
  • Doctors
  • Lawyers
  • Real estate brokers
  • Salespeople
On the flip side, low-risk jobs often require professionals to remain detail-oriented and provide a stable work environment. Statistically, professionals in these types of jobs tend to have a lower risk of accidents. Some drivers in these low-risk occupations pay lower car insurance rates:
  • Accountants
  • Artists
  • Nurses
  • Pilots
  • Scientists
  • Teachers

Customer Loyalty

Customer loyalty doesn’t always get you as big a discount as you might expect. While many insurance companies tout loyalty rewards as a selling point, some might jack up your rates by as much as 25% before offering a 10% loyalty discount. Called price optimization, insurance companies reserve the practice for customers who they feel are not likely to shop around for more cost-effective coverage elsewhere.
Using a sophisticated algorithm, insurance companies use an index that shows the likelihood of you switching providers in response to price increases. Shopping around for insurance often represents the best way to fight against this.

Having a Baby

On the flip side, you might see a positive impact on your car insurance rates if you or your spouse has a child. Many times, a life event such as having a baby inspires parents to purchase a larger vehicle with added safety features, which causes rates to go down. So if an insurer deems you a safer driver, your rates will most likely fall.

Buying a Home

Buying a home is another surprising difference maker when it comes to your car insurance rates. Owning a home usually saves you money on car insurance.
The state you live in plays a part in the amount you pay. The following table details how much more renters tend to pay for car insurance compared to home buyers in a variety of locations.
How Much More Renters Pay For Car Insurance Each Year Compared to Homeowners
City State Farm GEICO Allstate Progressive Farmers Liberty Mutual Nationwide City Avg.
Baltimore, MD $98 $0 $66 $82 $100 $636 $0 $140
Chicago, IL $22 $0 -$134 $26 $182 $168 $70 $48
Denver, CO $28 $0 $110 $0 $0 $180 $108 $61
Houston, TX $42 $0 $146 $42 $88 $288 $0 $87
Louisville, KY $44 $0 $64 $64 $768 $192 $160 $185
Newark, NJ $64 $0 $460 $38 $78 $671 $32 $192
Phoenix, AZ $26 $0 $48 $22 $58 $312 $76 $77
Portland, OR $46 $0 $36 $0 $44 $180 $0 $44
Syracuse, NY $14 $0 $120 $12 $116 $60 $88 $59
Tampa, FL $54 $0 $924 $34 N/A $384 N/A $279
Company Avg. $44 $0 $184 $32 $159 $307 $59 $112
Source: Lifehacker
Finding cost-effective car insurance rates can prove to be difficult enough without some of the above factors. If you fall into any of the above groups, make sure to look for car insurance that does not penalize you.