I received an interesting email a few weeks ago from an agency called Autoinsurance.org, a free online resource for anyone interested in learning more about auto insurance. At this website you can compare insurance rates from various insurance companies for free. I did visit the website, but I did not do this for rate comparison but rather because the person emailing me posed an interesting question — he wrote: “you could be the best driver in the world and have the cleanest driving record, but still be charged more because … “ and then added several factors that go into insurance rates. This website provided much of the information for this article.

All drivers need insurance — it’s required by law. So, how are the rates we pay determined? Are the rates fair? What are some of the non-driving factors that determine what we pay?

When I moved to Malone in 1975, my insurance rates dropped significantly. Nothing changed except moving from the Utica area to Malone. So where you live affects the rate you pay. A driver’s ZIP code is one of the most crucial non-related driving factors that insurers use to calculate rates. There is a multitude of reasons behind this factor. A driver may live in an area prone to crime, making their car more likely to be stolen or vandalized. Or they may live in a busy area with an above average crash rate.

Age is another common factor that insurers use to determine rates. While it may not initially seem related to driving, insurers base rates on age by arguing that the more experienced drivers are, the less likely they will crash. The result is that older and younger drivers are often charged more, especially teenagers. However, part of this age discrimination is based on crash data, as insurers look at crash patterns amongst ages.

Some insurers also use credit scores as a factor in their rate calculations. Drivers with a lower credit score will have slightly higher rates than drivers with a high credit score. The reasoning behind this is that drivers will be more likely to make payments on time if they have a high credit score.

Both your occupation and education are used together to determine how much you’ll pay. Professionals in skilled positions and executives who have completed college tend to pay less for insurance than entry-level or blue-collar workers who have only a high school diploma. The Consumer Federation of America has done an analysis to show that most major insurers charge their clients with less education and a lower status job higher rates.

While a few states have banned insurers from using gender to determine auto insurance rates, many insurers still practice this. Men often have higher rates than women, as crash data from sources like the Insurance Institute for Highway Safety often show men are more likely to be in a fatal crash than women. However, many argue that basing rates on gender is outdated, and drivers should be charged based on their driving merit, not their gender.

Determining insurance rates may or may not be fair, but at least rating-based costs have statistics behind it. However, while many non-driving-related factors are outside your control, driving safely and keeping a clean driving record can help you save on auto insurance. It may also save your life.