Best auto insurance rates

The Biggest Factors Affecting Your Auto Insurance Rates

What Causes High Auto Insurance Rates?

You might be surprised to learn how insurance companies use your information to calculate your auto insurance premium. 

In other words, no two people will have the same premium for the same vehicle.

How do I find the best auto insurance rates

The Driving Factors That Raise Your Auto Insurance Rates

Tired of sky-high auto insurance premiums? 

You're not alone.

But before you start shopping around for a new policy, take a look at these 13 factors that could be affecting your current rate.

By understanding what goes into calculating your premium, you can take steps to lower your costs and get the best deal possible.

  • Driving history: This is one of the biggest factors that insurance companies consider. A clean driving record with no accidents or tickets will result in a lower premium.

  • Credit score: Your credit score is another major factor that insurance companies use to assess your risk. A higher credit score typically means you'll qualify for a lower premium.

  • Age: Younger drivers, especially those under the age of 25, typically pay more for auto insurance. This is because they are statistically more likely to be involved in accidents.

  • Marital status: Married drivers tend to pay less for auto insurance than single drivers. This is because married drivers are seen as being more settled and responsible.

  • Gender: In the past, gender was a factor used to determine auto insurance premiums. However, this is no longer allowed in many states.

  • Your car: The type of car you drive can also affect your premium. Sports cars, luxury cars, and high-performance vehicles are typically more expensive to insure than sedans or minivans.

  • Your commute: If you have a long commute or use your car for work, you will likely pay more for auto insurance. This is because you put more miles on your car, which increases the risk of an accident.

  • Your location: Where you live can also affect your premium. Drivers who live in urban areas or areas with high crime rates typically pay more for auto insurance.

  • Your coverage: The amount of coverage you choose will also affect your premium. Higher coverage limits will result in a higher premium.

  • Your deductible: The deductible is the amount you have to pay out of pocket before your insurance company starts to cover the cost of a claim. A higher deductible will result in a lower premium.

  • Discounts: There are a number of discounts available for auto insurance. These discounts can be for things like good driving history, taking defensive driving courses, insuring multiple vehicles, and being a student.

  • Your insurance company: Not all insurance companies are created equal. Be sure to shop around and compare rates from different companies before you buy a policy.

By taking steps to improve these factors, you can lower your auto insurance premium and save money. For example, you can improve your driving history by taking a defensive driving course. You can also improve your credit score by paying your bills on time and keeping your credit utilization ratio low.

If you're looking for more ways to save on auto insurance, be sure to talk to a qualified insurance agent. They can help you find the best coverage for your needs at the most affordable price.

What determines your auto insurance premium?

After you provide your details, the insurance company will process that information in a complicated economic model, which ultimately spits out a final insurance premium.

Most of us know the significant factors companies use in their calculations — the value of your car, your driving history, the type of insurance you’re taking out, and so on — but few of us know about the smaller factors. Moreover, these smaller factors can contribute significantly to your premium.

In this article, I’ve collected seven 13 well-known factors that can increase your auto insurance premium. If you would like to suggest any other factors, you think people should know about; please leave a comment at the end of the article.

Historic Coverage

Insurers prefer that their customers have been insured for as long as they’ve owned a car. Gaps in your insurance don’t look good as driving uninsured is a huge risk.

When you take out a new policy, your provider will probably check your current insurance information to see if there are any suspicious uninsured periods.

You may also receive a discount if you have been with an insurer for several years.

NHTSA Safety Rating

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Your insurer will almost certainly look at the safety of your car when calculating your insurance premium. Unsafe vehicles are more likely to result in injured occupants, which means a higher payout for the insurer.

In the US, car safety ratings are set by the National Highway Traffic Safety Administration through the 5-Star Safety Ratings program. This program puts new cars through a battery of tests to discover exactly how safe they are in a variety of crash conditions, including frontal crashes, side barrier crashes, side pole crashes and rollover resistance.

One star is the lowest rating, and five stars are the highest. Generally speaking, more stars mean a safer car and, therefore, lower insurance premiums.

The safest cars of 2018 were the Toyota Camry, Honda Accord and Honda Civic, which all scored ten out of ten. Other high-scoring vehicles include the Kia Cadenza, Buick LaCrosse, Nissan Maxima, and Chevrolet Bolt.

Likelihood of Theft

Unfortunately, some cars are more likely to be stolen than others. Last year, the most stolen autos (and trucks) were: the Honda Civic, Honda Accord, Ford F-150, Chevrolet Silverado, and Toyota Camry, although that may be because they were the most common cars on the roads.

Cars higher on the theft list will tend to attract higher premiums, as there is a higher risk of theft.

Some of this cost can be offset by installing anti-theft security features like immobilizers, alarms, and trackers.

Credit Score

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Many insurance providers will use your credit score in their insurance calculations. However, this varies hugely between providers, so it’s difficult to discuss.

In general, though, a stronger credit score will mean a lower insurance premium and a weaker credit score will indicate a higher premium.

One experiment we found online showed a 64% difference in price when obtaining quotes with a good credit score compared to a bad.

With a bad credit rating (any rating sitting between 300 and 579), the testers were quoted $3,522, but with an excellent credit rating (any score sitting between 580 and 800), the testers were quoted just $1,260.

(This example was the most extreme example we could find, so your credit score is unlikely to affect your quote to this extent.)


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One of the most common factors in insurance calculations is the profession of the motorist. That’s because there is a strong link between occupations and the likelihood of car insurance claims.

If you work in a high-risk profession, your insurance premium is likely to be higher. Conversely, if you work in a low-risk occupation, your premium is likely to be lower.

The most expensive professions include motor racing drivers, others sportspeople, funfair employees, canvassers, scrap dealers, and exotic dancers. The least costly jobs include nurses, distillery workers, coastguards, judges and teachers.

While it might seem easy to tweak your job title for a cheaper premium, you should avoid this at all costs. If you have an accident and your insurer discovers you lied about your profession, they may invalidate your claim.

Email Address

One of the least investigated factors and varies immensely between insurance providers.

According to a report from the UK’s Money Saving Expert, some insurers may use your email address as part of their calculations. In the Money Saving Expert’s tests, half of all providers gave different quotes depending on the email address used. However, no one email provider delivered consistently lower quotes.

Since this varies between insurance providers, there’s no set rule for what email providers cost more or less, but I thought it was interesting to point out.

Relationship Status

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It turns out your relationship status isn’t just for Facebook, your insurance provider will use it when calculating your insurance premium too.

One of the more interesting points is that married people are statistically less likely to get into accidents and, therefore, attract cheaper insurance premiums.

However, several experiments have concluded that the actual difference between single, married, widowed and so on is very small.

Your Age

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Age is one of the most well-known factors in the list. Generally speaking, younger drivers will have less driving experience and are, therefore, more likely to be involved in an accident. Also, because younger drivers are more likely to be involved in accidents, they also have to pay more upfront.

There’s a fairly widespread belief that your insurance suddenly becomes a lot cheaper once you hit 25-years-old.

Well, that’s not always true, and you shouldn’t rely on getting a discount on the day of your 25th birthday!

However, as you get older, you should expect your premiums to decrease as long as long as no additional violations or accidents occur.


Car modifications like aero kits, exhaust kits, vents, spoilers, and other car modifications will probably increase your insurance premiums. Also, if you modify your car in the middle of a policy, remember to inform your insurance provider, as undisclosed modifications could result in your policy being invalidated.

On a more positive note, safety modifications — alarms, immobilizers, trackers and so on — will usually decrease your insurance premium, because they help deter thieves and make recovery of the vehicle substantially easier.


Best local Missouri insurance companies.

Since car insurance is regulated at the state level, where you live can have a significant impact on how much (or how little) you pay.

Michigan, for example, is what’s known as a ‘no-fault’ state and requires all drivers to carry unlimited Personal Injury Protection (PIP) coverage. So not only do drivers have to pay for PIP coverage, but they also have to pay a premium for unlimited coverage.

Ohio, meanwhile, does not have a ‘no-fault’ stipulation, which means car insurance premiums are typically $1,500 cheaper in, say, Cleveland than in Detroit.

Insurers will also use more granular location data to improve their pricing. If you live, work or store your car in a high crime zip code, insurers will charge you more than if you live, work or park your vehicle in a low crime zip code.

Other location-based considerations include how populated an area is and ecological factors like flooding and wildfire risk.

Vehicle Ownership

Because of the wealth of finance options available, there’s a lot of ownership statuses possible with your car. You could own it outright or lease it from a company.

Each of these options will affect your premium, but how it does so (whether positively or negatively) will depend on the provider you choose.

Owning Your Home

insurance brokers

For a long time, insurers have used home ownership in their insurance calculations. The consensus was that people who owned their home were more financially stable, and therefore less likely to break an insurance contract.

Unfortunately, this means renters will usually pay more than homeowners, even if their economic status is the same.

The Automotive Economy

Car insurance

Like most services, insurance is prone to influence from the economy of the broader sector. For example, if there is a long-term problem with the supply of a particular component or part, the price of insurance for that car will probably increase with it.

To find an affordable local auto insurance premium in your area, click on the link below.

About the Author

John Espenschied is a long-time veteran of the insurance industry. He has worked in various positions within the industry for over 20 years, and for the past 15 years, he has been the owner and operator of Insurance Brokers Group, an independent insurance agency. John loves advising people on the insurance that meets their needs and goals, whether it be for personal or commercial purposes.

John is married to Melissa, and they have three children together, as well as three grandchildren. In his spare time, John enjoys golfing and playing in the golf league, biking to their local brewery along the Missouri river, and going on motorcycle rides when the weather is nice.

John Espenschied

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