Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Here's what you need to know...

  • Car insurance carriers use many different factors to determine your premium
  • Your premium is a reflection of the risk the car insurance company feels they are taking by insuring you.
  • There are steps drivers can take to reduce their car insurance rate such as getting rid of unnecessary coverage and increasing deductibles
  • Drivers should also inquire about any discounts that may be available to them.

For many drivers, the cost of car insurance can be a mystery and an unaffordable one at that.

Drivers may be unsure of why their premium is what it is or steps that they can take to decrease what they pay.

However, utilizing a car insurance price comparison calculator can help drivers to compare several different auto insurance companies, policies, and premiums all in one convenient spot. This allows them to choose the policy that is best for their situation and for their budget.

Enter your zip code above to compare car insurance quotes in your area today!

What determines the price of my car insurance premium?

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Car insurance companies and their underwriters consider many different factors when quoting drivers a premium.

These factors tell the auto insurance carrier how much risk they are assuming by agreeing to provide car insurance for you. The higher the risk they calculate you to be, the higher your premium will likely be.

Here are the factors most car insurance companies take into account when providing you with a premium:

Your Age

Younger drivers tend to be at a higher risk for having accidents.

Your Gender

In general, men take more risks than females and are more likely to file claims on their auto insurance policy.

Your Marital Status

For men especially, being married can cause a dramatic reduction in auto insurance rates. This is because married men tend to be more responsible knowing that others rely on them.

Your Credit History

While some drivers are surprised or even upset, there is no denying that your credit score and report can have the potential to drive up your car insurance premiums.

In most states, car insurance companies have a legal right to take this factor into consideration.

Some studies show that people with poor credit scores, late payments, and accounts in collections are more likely to file car insurance claims while people with better or even excellent credit are known for filing fewer claims on their auto insurance.

Your Driving Record

This factor is a given. Auto insurance companies take into account your past driving behavior in order to determine future behavior and therefore how much of a risk you might be for them.

Recent tickets and accidents will drive your auto insurance rates up, while good driving records will likely bring your premium down.

How Far You Drive

The farther you drive to work or to somewhere on a regular basis, the higher your chances are of being in an accident and filing a claim. In addition, people who drive for work, such as delivery drivers, will likely pay higher premiums since they are driving more frequently.

Where You Park Your Car

Cars that are parked in garages are safer from theft, vandalism, and weather than cars that are parked along the street or in uncovered parking areas. If you park in a garage, you will probably see a lower premium than drivers who do not.

The Number of Drivers on the Policy

The more people on the policy the higher the likelihood that the car is being driven often. This raises the risk of an accident and a claim being filed, which in turn raises the auto insurance premium.
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Ways to decrease your auto insurance premium

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Drivers may feel like their hands are tied when it comes to the price of their auto insurance premium.

There are many factors that cannot be changed by drivers such as how far you drive to work, your driving history, your gender, or your age.

However, there are a few ways for drivers to have some control over how much their premium is.

Reducing Unnecessary Coverages

While it is always important to make sure you maintain the minimum amounts of legally required auto insurance in your state, you may be able to let go of some portions of your auto policy in order to make your premium more affordable.

Coverages you may be able to consider letting go of are roadside assistance, collision, and comprehensive.

Raising Deductibles

Even if you do not want to cancel any portion of your auto insurance policy, raising your deductibles on the collision and comprehensive coverage can help reduce your premium. This means you will pay more if you end up needing to file a claim, however, you will pay less for your entire premium.

Improving Credit

While this will not happen overnight, drivers who have worked towards improving their credit scores have been able to take advantage of lower premiums. Making on-time payments, paying accounts in collections, and not opening any new lines of credit can help over time.

Driving Better

This step will also take some time, however, working to improve your driving record by obeying posted speed limit laws and avoiding accidents when possible can help you get a better auto insurance rate in the long run.

Considering a Different Vehicle

Some cars are more expensive to insure due to the cost of repairing or replacing them or because they are more likely to be stolen or damaged. You can speak to your car insurance company about this factor to determine if a different car might lower your premium.

Asking for Discounts

There are many different discounts available to drivers. Although many auto insurance carriers do not apply them unless the policyholder specifically asks about discounts.

Drivers may want to ask their car insurance company about the following discounts:

  • Accident-free
  • Multi-vehicle
  • Multi-policy
  • Multi-driver
  • Good student
  • Occupational discounts
  • Low-mileage
  • Defensive driving course graduate
  • Military
  • Payment method
  • Safety/anti-theft equipment

It is important for drivers to remember that nearly every state requires at least some type of auto insurance in order to drive on public roads. If they find car insurance difficult to afford, they should use the aforementioned tips to decrease their premium.

They can also use an online price comparison tool to ensure that they are receiving the best premium rate available to them.

Enter your zip code now to search for the best car insurance rates for your budget!