What Drives Rates?
The price you pay for Auto Insurance is based on your
level of risk, which is determined by the decisions you've made.
It's important to understand the risk factors insurers consider
when determining your level of risk so you can make the necessary
changes in your life to lower your insurance premium.
Your driving record mirrors your behavior behind the wheel. If
you've been involved in accidents and committed serious traffic
violations, you can expect to pay more for insurance than if you
have a clean driving record.
Number of Miles Driven
The more miles you drive, the more time you spend on the road
and the greater the odds of getting into an accident. If you drive
less than 10,000 miles per year, you can expect to pay less than
a person who drives 20,000 miles. Some companies offer discounts
to policyholders who carpool or work from home.
Where You Live
Insurance companies examine local trends in accident frequency,
car thefts, lawsuits, vehicle repairs and the cost of medical
care when determining your level of risk.
Statistics show that more experienced drivers are involved in
fewer accidents than less-experienced drivers. Insurers normally
charge more for teenage drivers and adults under 25 due to younger
drivers' higher frequency of accidents.
The kind of car you drive plays a big part in determining what
you pay to insure it. Insurance companies evaluate the cost of
the car, the cost to repair it, the likelihood of theft and the
car's overall safety record. If you own a sports car, you should
expect to pay more for insurance than if you drive a sedan or
A higher limit of coverage gives you more protection and increases
your insurance premium. Lower limits of coverage cost less in
the short-run because you assume more financial risk following
Some insurance companies include your personal credit history
as part of the underwriting process. This is called a Credit-based
Insurance Score. Statistics show that drivers with lower scores
file more claims than those with higher scores. Fortunately, most
people have favorable credit ratings. Insurers look at a numerical
score derived from your credit report. Insurance Scores do NOT
consider ethnicity, gender, income, marital status, age or home