Factors that Affect Your Car Insurance Premium

There are so many unique factors that collectively calculate your monthly premium that it’s enough to make a normal person’s head spin. Your insurance company is all about protecting themselves from financial risk, which is why the math is so tedious and confusing. But don’t let that get you down.

You can get an idea of how much you should expect to pay for your auto insurance coverage options based on several obvious factors that are unique to you and your personal circumstances. With this knowledge comes the power to negotiate with your prospective insurance company and get the most affordable rate.

You can compare auto insurance rates right now with our FREE comparison tool.

Factor #1 — Where You Live

Where you park your vehicle each night will have a huge impact on how much you pay for car insurance so expensive. Just look at the chart below. We’ve calculated average rates for an average driver in the top 3 most expensive and the top 3 most affordable states. Circumstances such as population, number of accidents reported per year, and the cost of living will determine whether you live in an area that is safe or dangerous for the average motorist. And your insurance premiums will be higher or lower as a result.

Average Monthly Premiums by State


Legend:
Average Monthly Premium by State

Maine
Louisiana
Iowa
Oklahoma
North Carolina
Michigan
Idaho
Montana


15
30
45
60
75
90
105
120
135
150
165
180
195
210



$74

$211

$82

$171

$85

$168

$84

$155

(For more information, read our “How to Lower Your Auto Insurance Premiums“)

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Factor #2 — Credit History

One of the most important factors when it comes to determining your monthly premium has to do with your credit score. Also, to a lesser extent, something called your “insurance score” will apply as well. Insurance scores are calculated using factors that are relevant to how risky a driver you may be — such as past claims filed, payments made on time to other insurance companies, and your driving history. Other insurance agencies may delve into your economic past and calculate your risk based on less relevant things. Be sure to ask your prospective insurance company whether they use your credit score or your insurance score to figure out how much to charge you for your monthly premium, especially considering how your credit score affects your car insurance premiums.

Monthly Premiums Based On Credit History


Legend:
Excellent Credit
Good Credit
Poor Credit

ALFA
21st Century
State Farm
Mercury
Nationwide


15
30
45
60
75
90
105
120
135
150
165
180





$81
$93
$107



$93
$121
$179



$100
$124
$192



$122
$138
$189



$125
$139
$180

Factor #3 — Driving Record

Insurance companies take a look at your driving record because they believe that it is the biggest predictor of whether or not you will get into an accident (and need to file claims with them as a result). If you have filed several claims or received several driving citations in the past few years, then you will likely have to pay a higher premium than drivers with a clean record. Eventually, these blemishes will disappear from your record (usually after about 5 to 7 years) and you can look forward to a lower premium in the future – assuming you go that long without filing claims are collecting tickets, that is.

Monthly Premiums: Clean vs. Several Tickets/Accidents


Legend:
Safe Driver
Several Claims

ALFA
21st Century
State Farm
Mercury
Nationwide


15
30
45
60
75
90
105
120
135
150
165
180
195
210




$93
$157


$121
$186


$124
$149


$138
$215


$139
$206

Factor #4 — Driving Experience

Practice makes perfect, and getting behind the wheel is no exception. The more driving experience you have, especially if you have a clean driving record, the less likely you are to pay expensive monthly premiums for your automotive insurance. This is why teenage drivers are usually charged insanely high rates for their car insurance coverage – it’s because their lack of experience makes them a risky investment. It’s a proven fact that most teenage drivers will get into an accident within their first year of driving, which means your insurance company has to charge them more in expectation of having to pay out expensive claims.

Average Monthly Premiums by Age


Legend:
Average Monthly Premium

18 Year Old Driver
25 Year Old Driver
35 Year Old Driver
67 Year Old Driver
85 Year Old Driver


20
40
60
80
100
120
140
160
180
200
220
240
260
280
300



$305

$96

$76

$64

$128

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Factor #5 — The Vehicle You Drive

Yes, even the type of vehicle you drive can predict whether or not you may have to file a claim. It will also determine how expensive that claim may be. Things such as theft, a lack of safety features, and the overall cost to repair or replace your vehicle will all come into play when your insurance company decides how much to charge you for your monthly premiums. Obviously,  people who drive older, economically priced, less popular cars are least likely to file an expensive claim. And their monthly premiums will reflect that. But driving a shiny, new luxury vehicle which thieves like to steal will bump up your insurance premium significantly.

Average Monthly Premiums by Vehicle Make/Model


Legend:
Average Monthly Premium

2016 Tesla X
2014 Honda Accord
2012 Ford F-150
2015 Chevy Corvette
2018 Acura MDX


15
30
45
60
75
90
105
120
135
150
165
180
195



$197

$88

$100

$156

$147

Read more: Acura Car Insurance | Cheap Acura Insurance Rates

Minor Factors: Marital Status, Homeownership, Annual Mileage, and More

Minor personal circumstances, such as your marital status, owning a home, working a specific job, and your annual mileage will also have an influence on how much you pay for your car insurance premiums. Being married, owning a home, driving fewer miles than the average motorist, and working specific jobs (such as serving in the military or being a member of the union) will all help to lower your rate. Obviously, your monthly rate will be higher if any are all those factors that do not apply to you.

Regardless of your personal circumstances, you can still end up saving money on your car insurance by shopping around for the lowest rates. And if you let us help you, all you need is your zip code and you can find the most affordable premiums from insurance companies near you. You can start saving money today with our FREE auto insurance comparison tool.