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Joseph M. Ghabour & Associates LLC

What determines the cost of my car insurance?




  • Who you are

  • How you drive (and how much)

  • Where you live

  • What you drive


Who you are

Just about everything insurance companies do is based on statistics, and statistics show that your likelihood of getting into an accident depends to a significant extent on who you are. For the purposes of car insurance, “who you are” boils down to three things: your age, gender, and marital status.
  • Age: Regardless of whether you chalk it up to inexperience or developmental immaturity, young drivers get in far more accidents than their older counterparts.
  • Gender: Males are involved in more collisions than females.
  • Marital Status: Married people get in fewer accidents than their single friends.
That means that young, single, male drivers, who get into the most accidents of any group, typically pay the most for car insurance. Married women, on the other hand, generally enjoy the lowest premiums.

Your driving record

If you have a spotless driving record—no tickets and no accidents in which you were at fault—your rating factor will naturally be lower than someone with a number of blemishes.

Where you live

As you would probably guess, there are more accidents in cities than in rural areas—more cars, more traffic, as well as more break-ins and theft. That’s why urban drivers, on the whole, are stuck with higher rating factors.

How much you drive.

The more you drive, the more time you spend in your car, and the more time you spend in your car, the higher the probability of getting into an accident over a given period of time.

The car you drive.

From the perspective of an insurance company, who has to pay for your car repairs, denting your Ferrari is a great deal different than getting into a fender bender in your old truck. If you drive an expensive car, it’ll cost more for comprehensive and collision insurance.
Aside from the cost of repairs, the car you drive can impact your rating factor in other ways as well. One variable is the theft rate—how often your make and model is stolen. If your car is a favorite among thieves, it’ll likely cost more to obtain comprehensive coverage.  Another consideration is the safety of your vehicle. A high safety rating and a good safety record on the road mean that the injuries you might suffer in an accident would likely be less severe than if you are driving a car that was rumored to flip or crumple like tin foil.
[Excerpted from Joseph M. Ghabour's book, Accidents Happen: Guide to NJ Auto Accident Claims]

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