A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Here's what you need to know...

  • Insurance companies use a long list of personal factors that aren’t related to your driving history to set your car insurance rates
  • The factors that are used have been researched to prove that they have an effect on a driver’s likelihood of having a loss
  • One factor that has a bearing on how much you’ll pay for coverage is your marital status
  • Marital status is used in conjunction with your gender to compare claims rates. Married men are statistically better drivers than single men in their age group.
  • Having a new baby in the household doesn’t directly lower your rates, but this life change may have an indirect effect if you purchase other lines of insurance
  • If you purchase a safer car, move into a home, buy life insurance or changing your driving habits, you may watch your rates drop

If you already have a child, you know that welcoming a baby to the household completely changes your life. With the new family member comes added responsibilities and new life decisions. You’ll need to make childcare arrangements, decide whether or not to bottle feed, and think about a host of different ways that you can protect your family. Many new parents put an even greater focus on building a comprehensive insurance portfolio once their new additions leave the hospital. Compare car insurance rates now by using our FREE tool above!

Major life changes often have a direct affect on your car insurance rates, even when they don’t appear to have anything to do with your driving; this is the case with many things that seem like they have nothing to do with your driving ability, such as the type of vehicle you drive,; this is the case with many things that seem like they have nothing to do with your driving ability, such as the type of vehicle you drive,; this is the case with many things that seem like they have nothing to do with your driving ability, such as the type of vehicle you drive,; this is the case with many things that seem like they have nothing to do with your driving ability, such as the type of vehicle you drive,. This is why it’s crucial for you to understand the rating factors that are considered to calculate premiums and how baby-related changes could affect what risk class the insurance company puts you into. Here are some of the instances when your rates will go down and even somewhere they might go up:

Why do insurance companies look at personal factors?

Many people assume that insurance companies are only concerned with the type of vehicle they drive and the way they drive it. While those are two factors that are considered when determining rates, they aren’t the only ones. Insurance carriers take a close look at the lives of applicants to see if they’re eligible for coverage and how much they need to pay for the coverage that they desire.

Actuarial research has shown that each factor used does have a bearing on risk and how likely a household is to file a claim.

Just like your accident history and your driving record can make you a bigger risk, so can your personal choices and your lifestyle. There still are limitations as to what an insurer can consider and how much affect each personal factor can have. These limitations are set by the Department of Insurance in the state.

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What personal factors are taken into consideration when underwriting an application?

Not all personal factors are taken into consideration, but those that are might surprise the average person. Over time, as your life changes, so will the way that you’re rated. Here’s are some of the most important personal factors used to assess risk and exposure to loss:

  • Housing Status: Some companies offer lower rates to homeowners than they do to renters. This is because the statistics show that homeowners are more likely to pay for their own claims to avoid rate hikes.
  • Territory: The area where you live has a dramatic affect on your rates. If you live in a highly populated region or a zip code with a high rate of claims, you’re likely to pay an inflated premium. It’s important to compare the rates by zip code as you’re pricing out auto insurance rates.
  • Credit Score: Your credit can be used to calculate your insurance score. This score has a direct affect on your rates because credit represents financial responsibility. Not all states allow companies to use credit-based insurance scoring to calculate rates, but if you live in one that does, be sure that you know how your score is used.
  • Gender: No matter how much men and women will disagree, the statistics show that women are better drivers than men. Some believe that this is because men drive more often than women and others believe it is male impulse behind the wheel. Either way, men in almost every age group pay more than women for coverage. The gap is huge for younger drivers and begins to narrow as the age range goes up.
  • Driving Experience: What age were you licensed? If you were licensed at a younger age, you can gain driving experience and credits. The more experience you have, the lower your rates will drop. If you have violations or accidents, the drop won’t be very significant.
  • Marital Status: Gender and marital status go hand in hand. Since young, single males are the highest rated risk class, males tend to benefit the most when they’re married. The data shows that men who’re married get into less accidents as a whole
  • Occupation: In some cases, your job can qualify you for affiliation or affinity discounts. Since some professionals tend to be more responsible behind the wheel. it makes sense to give these drivers discounts.
  • Usage and Annual Mileage: How much you drive can affect your rates as well. If you’re commuting to and from work daily, you’ll pay more than a retiree who drives to the store once a week. Pleasure usage comes with the lowest rating followed by commute. Annual mileage also affects your rates because high mileage means high exposure to accidents. Keep this in mind when you’re making arrangements to get to and from work or school.

Will having a baby affect rates?

If you call your insurance agent and let them know you’ve just had a baby, they might congratulate you but they won’t lower your rates.

There’s no place on an application that asks if you’re expected or if you have an infant in the home.

While you might feel like pregnancy has made you a safer driver, it’s still a detail that’s not used today.

The Indirect Impact

Having a baby can still affect how much you pay for your coverage indirectly. Here are some of the choices that can change your rates:

  • You buy a new vehicle with a better safety rating
  • You add safety features to your existing vehicle
  • You get married to your long-time partner
  • You buy a home or condo
  • Your credit score goes up after buying property
  • You decide to be a stay-at-home parent and drive only for pleasure

If you’re expecting, it’s time to review your insurance policy closely. Look for gaps and coverage and consider raising your level of protection. To price the cost of coverage through other carriers, use an online rate comparison tool and see what all of the top insurers will charge your family. Enter your zip code in our FREE tool below to compare car insurance rates now!