Written by: CarInsuranceRates.com

The number crunching nerds who got made fun of for wearing pocket protectors, playing Dungeons & Dragons, and obsessing over their rotisserie baseball teams have found a way to get revenge on the world – they now work as car insurance actuaries!

Actuaries are high-powered math geeks who develop formulas that estimate the probability of insurance loss. These formulas are then used to determine car insurance rates. So the next time you think about stuffing a dweeb inside a locker, think twice – he might be setting your car insurance rates some day!

Major Factors That Actuaries Take Into Account

First and foremost is your driving record. Actuaries believe that someone who has been in a lot of accidents, gotten a lot of tickets, or filed previous claims is likely to file claims in the future. Therefore, these people pose a greater risk to the insurance company, and whenever you pose greater risk, you pay for it.

Second are demographic factors. Your age, for example, is very important. People under 25 present much more risk to insurance companies (with people 16-18 paying the most, and people 22-25 paying the least among them), and thus pay higher car insurance rates. But older is not always better – people over 65 are also thought of as “risky,” and therefore, they often pay rates comparable to their grandkids.

The other major demographic factors are gender, marital status, and geography. Married women pose the least risk to insurers, and unmarried men present the most. The gender bias in favor of women is strongest among young people, with teenage boys paying much higher car insurance rates than their female counterparts. As for geography, if you live in an area in which more claims are filed, your rates will be higher.

The final major factor affecting your discount car insurance rates is your car itself. Is the car safe? How many claims have been made by people with the same or similar cars? What is the value of the car? How much damage does it cause to other cars (or other people) in the case of an accident? All of these issues are computed by the actuaries and their formulas.

Comparatively Minor Factors That Affect Your Car Insurance Rates

First among the less important factors is your credit score. While it was not taken into account at all in the past, your consumer credit file is growing in importance to insurers. In fact, it may soon register as a major factor.

Other minor factors include your occupation (some professions produce statistically safer drivers than others), miles driven per year, distance to your workplace, years of driving experience, and whether or not you’ve ever let your car insurance lapse.

 Furthermore, a variety of discounts are available to offset your car insurance costs. There are discounts available for having a theft device, having anti-lock brakes, having multiple cars insured by the same insurer, and having your homeowner’s or renter’s insurance with your car insurance provider. Students can even receive a discount for getting good grades!

Adding It All Up – What Can You Do to Save?

All of these factors are taken into account to determine the overall risk you pose to your insurer. Few people fit the perfect profile. For example, you could be an unmarried 55-year-old engineer who lives in a large city (cities are more dangerous than rural areas) and has bad credit. Or maybe you’re a married 22-year-old honors student with perfect credit who drives a Hummer. Everyone’s circumstances are different, and it is the sum of all factors that determine your car insurance rates.

So what can you do to save? First and foremost, it pays to be informed. If you don’t understand the various forms of car insurance coverage and how they work, you can’t possibly hope to get the best deal. Use web resources such as carinsurancerates.com to learn all you can about car insurance, and then make sure you understand your current coverages. Find your declarations page that explains the limits, deductibles, and scope of your policy, and then shop around online to see if you can save money. Many people are actually able to increase their coverage while saving on premiums at the same time.