Six Factors State Farm Insurance Considers When Calculating Rates


State Farm insures millions of people around the country, providing car insurance to drivers of all ages in cities all over the US. You might think that with this many people insured, there would be more information more widely known about insurance, but it’s just not so. Most people are so unconcerned with their car insurance that they have virtually no idea what it is that is affecting their rates, their ability to find insurance and their premiums. As long as they are insured, they don’t tend to look any deeper into the facts.

However, State Farm wants their clients to know that there are a lot of different things that affect the rates of their drivers. They want all current and potential customers to know that they do make the rules when it comes to car insurance, but that there are some things that are just working against you or for you; and that there is nothing they can do about things like that. Read on to find out what might be affecting the rates that State Farm offers to their car insurance policy holders.


It’s a lot to discuss, but age plays a big factor in insurance rates. For example, teenage drivers pay far more than drivers older than 20, and drivers older than 25 pay even less. The reason for this is that insurance companies such as State Farm believe that drivers of a certain age are far better drivers a lot less likely to become involved in an accident. Most people are unaware that your insurance rates should fall a bit each year until you reach the age of 60 – and this goes for both men and women – and that’s when it’s bound to begin to rise again. This is because you then become a bit of a threat on the road again – okay, we made that last part up, but it seems like that, doesn’t it?

Your Relationships Status

And no, we’re not talking about the one on Facebook. Whether or not you are married does play a role in the amount you pay for insurance for your vehicle, but this is not true all the time. For example, it’s not true that you will pay more if you are 30 and single, but it is true that you will pay more if you are 20 and single. Get married early and you will very likely see your insurance rates drop significantly until you are 25. At this point, you will see rates begin to even out and your relationship status will matter a bit less. This is one factor that does not affect you continuously throughout your life, but it is one that does have an effect on your rates when you are a bit younger. Lowering your insurance rates, however, is no reason to go out at get married at 20.

Credit Score

It’s not something that’s allowed in every state, but it is allowed in 47 states. State Farm and other car insurance agencies are free to check your credit score to determine how it might affect your rates. You might wonder how his is even possible, and we’re not entirely sure where they were given this right, but we do know how it works. Insurance companies use this information to see about your finances and your credit habits. They check to see about your debt to determine what kind of insurance they need to cover you with, and that will affect your rates and what you qualify for in terms of payments and coverage. Most people are completely unaware of what this means and how it affects them, so we will sum it up. The worse your credit score it, the higher your premiums will be for vehicle insurance coverage at State Farm.


Your employer cares whether or not you have a college education, and so does your insurance company. State Farm looks at information such as this to help them determine your rates. They are happier to insure educated drivers than they are drivers without an education. Why? Because these are people they believe are a bit less likely to cause accidents, more likely to pay their premiums and less likely to be the kind of customer to whom insurance companies despise offering coverage. Some insurance companies – and we aren’t sure about State Farm in this instance – offer more competitive rates and premiums to college alumni because they feel that this is the group of people less likely to drive poorly and cause accidents.

Zip Code

This one should not come as a surprise to drivers, but it often does. All insurance companies base your rates on where you live. This is because it’s just less expensive to insure people in certain areas than it is in others. Let’s be honest; if ever you’ve been in New York City and witnessed the way people drive around there, you wouldn’t want to insure drivers there either, would you? Chances are good that people in bigger, more populated cities are going to have a much different insurance rate than that of people who reside in smaller towns. And in addition to your zip code, the type of car you drive also plays a role in the kind of insurance rates State Farm will offer to you when you are in need of automobile insurance.


Most people – especially men – think that it’s considered gender inequality to charge men more for their insurance than women, but it’s actually not. State Farm considers gender when issuing car insurance because men are, by nature, riskier to insure. According to studies performed by the national government, most traffic and pedestrian fatalities in the US are caused by men. Nearly 70 percent of all traffic fatalities and 71 percent of pedestrian fatalities are caused by men drivers in this country. For that reason insurance agencies are more likely to raise rates on male drivers than on female drivers simply because they are the ones using their insurance most often.

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