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How Auto Insurers Calculate Rates

Automobile insurance companies use many factors when determining the amount you pay for premiums.  Each insurer will use a different formula to determine the exact price of your policy, but for the most part all auto insurance providers look at the same factors.  After looking at all of the factors below, the company will come up with a rate for your specific situation.

The factors that auto insurance companies look at include:

• Your Driving Record - A good driving record will lower your rates.

• Your Age - Younger drivers tend to be a greater risk and therefore will pay more for insurance.

• Type of Vehicle - The type of vehicle you drive plays a large part in the price of your premiums.

• Your Credit History - Many insurers now look at your credit report to determine your risk of loss.

• Your Gender - Women have been shown to be safer drivers, and therefore will pay less for coverage.

• Where You Live - This plays a large part in the prices paid.  If you live in a safe area, you'll pay less.

• Distance Driven - The farther you drive, the more you will pay for your coverage.

• Multiple Vehicles - If you insure multiple cars or trucks with the same company, you will pay a lower rate.

• Your Education - A college degree can mean lower car insurance rates.

• Safety Devices - Anti-lock brakes, alarms, and GPS tracking all will lower your premiums.

While there may be other factors that auto insurance providers look at when determining your premiums, there is no way to know how each item listed above will affect you rates.  The best way to get cheap car insurance quotes is to compare prices from as many insurance companies as possible.  To do that, just enter your zip code below to see which insurers in your area offer the lowest rates on coverage.