Many car owners avoid taking more auto insurance than the minimum level required by the state simply because of the exorbitant car insurance rates that they have to pay. Car insurance rates are made up of a base rate, after which an addition or reduction takes place, determined by a variety of reasons including those that are beyond the owners control.

Generally, an auto insurance company looks at the following aspects to decide on a suitable car insurance rate for each car owner:

Age: According to the US Department of Transportation, the probability of young drivers being involved in car accidents is four times higher than that of the elderly. Insurance companies take the view that young driver are more likely to speed, drink and drive, and not wear their seat belts. Families who have young drivers usually pay higher car insurance rates due to this additional risk. Marital status: Insurance companies perceive marriage as a reliable sign of maturity and responsibility, causing car insurance rates to be lower.

Gender: This is another uncontrollable factor affecting car insurance rates. Although bordering on sex discrimination, state laws allow insurance companies to raise car insurance rates for men drivers. Based on car accident statistics, young men below the age of 30 are involved in a great number of accidents compared to women in the same age group.

Location / Neighborhood: The area in which owners live plays an important role. Places with higher probability of car thefts incur higher car insurance rates. Likewise for certain states which have high density traffic, such as New Jersey and New York.

The Car: The more expensive the car is, the more its owner will have to fork out in both collision and comprehensive insurance costs. Collision coverage pays for repair costs, and cars with expensive spare parts increase cost. In addition, more expensive cars are more likely to be stolen.

Amount of Driving: Driving more miles than the annual average increases the cars exposure to damaging elements and risks of accidents or theft. As exposure increases, so does risk, leading to higher car insurance rates.

Driving and Claims History: Car insurance rates increase with the number of accidents and serious traffic violations a car owner has been involved in before. Besides this, an owner who regularly makes claims to insurance companies tends to have greater car insurance rates.

Credit History: Credit scores measure the types of credits taken, outstanding debt and reliability of past payments, among other things. If owners display stable credit scores over a long term and are able to keep their outstanding credit balances low, car insurance rates can be reduced as well.

It is important for car owners to shop around for the best car insurance rates with all the above factors in mind. Although owners cannot help the uncontrollable demographic factors like age and gender, they can still reduce car insurance rates by working on the controllable aspects like the type of car driven and credit history.