These Factors Affect your Auto Insurance Rates [Get Quotes and Save]

What factors affect your car insurance rates and how are car insurance rates calculated? The exact math behind these questions is far too advanced to explain here, but there are certain data and assumptions insurance companies can make to generate your auto insurance quote.

Consumers don’t like to be kept in the dark, but there are some things you can do to lower the cost of your car insurance despite the factors out of your control such as your age, gender, and driving record.

The best way to identify the factors that determine how much you will pay for car insurance is to pay attention to what is asked to get a quote. However, some of the factors that would influence your insurance costs are quite surprising such as your credit score, marital status, whether you rent or own your home, and even your level of education.

Keep reading to learn more about the factors that influence your auto insurance rates. When you’re ready to get free quotes, use our online quote tool to save.

What Factors into your Auto Insurance Quote?

When your automotive insurance provider sits down to calculate how much to charge you each month for your premium, they have one word in mind: Risk. The amount of money you have to pay monthly in order to stay insured is largely reflective of how high the risk is that you might file a claim, therein costing your insurance company money and cutting into their profit margin.

Men, for example, are usually more aggressive behind the wheel and therefore end up causing more accidents. Married people usually settle down, and are more responsible. This has correlated to having fewer accidents. Drivers under 25 years of age have less driving experience, and are also more likely to become involved in an accident than their older counterparts. Therefore, if you’re a 20-year-old single male with a shiny new sports car, your premiums are very likely to be higher than the average Joe or Jane.

The car insurance industry even has its own set of vocabulary for classifying your risk to their business model: Standard, Non-Standard, and Preferred.

Standard drivers are your every-day, average person. There is a moderate amount of risk involved in insuring them. Their auto insurance rates are higher than preferred policyholders, and lower than nonstandard. They have relatively clean driving records, with maybe a speeding ticket or two or a fender-bender.

Preferred drivers are drivers that are considered safe. They typically have good or excellent credit scores, pristine driving records, are between the ages of 25-65, and drive affordable vehicles with lots of safety features. These drivers enjoy some of the lowest rates available.

Nonstandard drivers are those in the high risk category. Their rates are the highest, and they usually include:

• Young drivers (Under 25 years of age)
• Inexperienced drivers
• Policyholders who miss payments, pay late, or have poor credit
• Drivers with poor driving histories (Accident, traffic citation histories)
• Convicted Drivers (DUI or reckless driving)

So, as you can see, having a clean driving record can make all the difference. Other factors can help lower your premium, like driving a car with excellent safety standards. Even your credit history can help, as shown above.

Insurance Rates by Risk Level

Legend:
Preferred Driver
Standard Driver
Nonstandard Driver

Florida
Texas
Illinois
California
New York

50
100
150
200
250
300
350
400
450

$128
$159
$181

$85
$146
$275

$30
$42
$88

$64
$91
$482

$86
$107
$310

Does Credit History Affect My Auto Insurance Premium?

Absolutely. In 47 out of 50 states, your insurance provider has the right to charge you higher rates based on a poor credit score. Only in California, Hawaii, and Massachusetts is it illegal for an automobile insurance company to charge discriminatory rates based on having poor credit. However, most insurance companies in those states get around this law by charging all of their customers a slightly higher monthly premium. This helps them recoup lost profits that they would otherwise have made from charging higher prices to drivers with poor credit. (For more information, read our “How Your Credit Score Affects Your Car Insurance Premiums“).

Legend:
Poor Credit
Perfect Credit

California
Florida
Illinois
New York
Texas

25
50
75
100
125
150
175
200
225

$64
$64

$227
$128

$56
$30

$152
$86

$177
$85

But even if you live in one of the many states where your insurance provider can legally charge more for having a poor credit score, there are some consumer protection laws on your side. For one, your provider cannot use your credit score as an excuse to discontinue an active policy or refuse to renew one.

Insurance companies also need to inform customers about how their credit information will be used before doing a credit check. They must also cite a specific reason if they refuse you the best rates based on your credit history.

There are many financial institutions out there – from insurance companies to banks and more – who profit from consumers like you remaining in the dark about your credit status. But it’s easier to check your score than you think. You have a legal right to a free credit report from any/all of the major credit bureaus listed below. And these reports don’t just inform you about your credit status; you can also review them for errors and, if any appear, report them in order to elevate your credit status.

For more information, you can get a free credit report from a number of different sources online or call the credit bureaus directly:

• Equifax: 800-685-1111
• Experian: 888-397-3742
• Trans Union: 800-888-4213