What Factors Impact Your Auto Insurance Premium?

According to the Insurance Information Institute, the average auto insurance premium in the U.S. rose by 15.3% in 2023. Understanding what affects your rates can help you manage costs effectively.

Q: How does my driving history affect my premium?
A: Your driving record is one of the most significant factors. Recent accidents or traffic violations can increase premiums by 20-40%. Most insurers look at the past 3-5 years of your driving history.

Q: Does my credit score matter?
A: Yes. A LexisNexis study found that drivers with poor credit file insurance claims 40% more frequently than those with excellent credit. Most insurers use credit-based insurance scores to help determine rates.

Q: How much does my vehicle type influence costs?
A: Significantly. Luxury cars, sports cars, and vehicles with high theft rates typically cost more to insure. Safety features and anti-theft devices can help reduce premiums.

Q: Does where I live affect my rate?
A: Yes. Urban areas generally have higher rates due to increased accident and theft risks. Your parking situation (street vs. garage) also matters.

Q: How does my age and driving experience impact costs?
A: Young drivers and those with less experience typically pay more. Rates often decrease after age 25 and with a clean driving record.

Q: Can my occupation affect my premium?
A: Yes. Some occupations are associated with lower risk and may qualify for discounts. Additionally, annual mileage related to commuting will impact rates.