The price that a person will pay for an automobile policy will vary with each applicant. There are several factors that affect what a person's premium will be, mainly the drivers and vehicles to be insured. To find out what one can expect to pay, individuals can simply get multiple quotes from various companies and conduct a price comparison.

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Factors that Affect Auto Insurance Costs and Why

Here are factors that insurers look at and evaluate in order to calculate premiums when individuals apply for coverage:

Driving Record: This is probably the factor that most affects what individuals will pay for policies. If a driver has maintained a clean history then they will be rewarded with a lower rate, but if a person has had several tickets and/or accidents they can be subject to higher prices. The reason for this is that the insurer will see them as a riskier motorist and assume that the chances of them breaking traffic laws and/or being involved in collisions are more likely.

Age: A motorist's age can have an impact on rates as well. A 16 year old driver has only had their license for a short period of time and therefore they can be charged more due to lack of experience behind the wheel. There are certain humps to reach in ages that can lower premiums. Once a person is over 25 years old they can expect to pay less than anyone under that age if they have maintained a good driving history. This would show that they have had quite a bit of experience operating a vehicle given that they were licensed as a teenager. Also, people under twenty-five are statistically shown to be more irresponsible on the roads than more mature drivers.

Vehicles: The type of automobile can play a big role in the prices of a premium. Companies view the statistics of vehicles in order to determine the risk involved in insuring them. For instance, if particular sports cars are frequently involved in crashes then the liability and collision policies may be higher than that of more economical autos. Another example would be automobiles that are stolen more often than others. In this case, comprehensive coverage may be more costly than cars that are not stolen as frequently.

Residence: The reason where a person lives can affect what they will pay for a policy is due to a couple of reasons. If they live in highly congested areas this likely means that there will be more vehicles on the road thus raising the chances of being involved in an accident. Also, if a person resides in an area with a high crime rate then their vehicle will be more exposed to the chance of vandalism or theft which can raise the cost of comprehensive protection.

Gender: This may seem unfair, but it is supported by statistics. Women usually will pay less than men for coverage. Studies show that men are more aggressive behind the wheel and are more likely to drive while under the influence of drugs or alcohol. Therefore, the fairer sex is rewarded with lower rates due to the fact that they are seen as less riskier to insure.


Though the above mentioned are the most common rating factors there are others that may offer a discount such as marital status, credit score, annual mileage, being a non smoker and profession. The less that a person drives the less that they are exposed to perils which in turn will lower their costs for protection. Certain professions entitle savings such as being an educator or an engineer. One should make sure to ask when shopping around if any of these can benefit them. They should also ask for any discounts that they may be entitled to help lower the price of being insured. Get answers to the common question how do insurance companies determine rates?" for more information and details on this subject.