Factors Affecting Your Premium

Insurers look at many factors to determine if an applicant is eligible for one of its programs and to determine what the premium will be. Common factors include:

Driving record

The company will ask for information about accidents and moving violations/convictions for any driver to be covered by the policy for the prior 3 to 5 years.

Garaging of the vehicle

The location where the vehicle will be kept and/or driven affects the rates. Some areas have higher rates of collisions, while others may have higher theft and vandalism rates.

Gender and age of drivers

Statistics still show that males have more accidents than females; statistics also show some age groups have higher rates of claims than others.

Marital status

Claims records indicate that married policyholders have fewer claims than unmarried policyholders.

Prior insurance coverage

Companies will ask if you have been insured, and whether you have been canceled or non-renewed in recent years.

Miles driven and use of vehicle

The use of the vehicle (driving to work or school, pleasure use, business use) and the number of miles driven will affect the premium. Higher daily or annual mileage and some types of usage create a greater exposure to claims.

Make and Model of vehicle

The type of vehicle driven will directly affect the premium.

Licensed drivers in your household

Any licensed driver in your household may affect the premium. "Licensed" includes an operator with a permit.

Claim history

Insurers will ask about any claims that you or any driver had during the past three to five years.

Credit history

Most insurers also consider your credit history to determine the appropriate premium to charge. Companies must comply with the requirements of the Federal Fair Credit Reporting Act in their use of this information to come up with an insurance score.


Companies offer discounts for insuring multiple vehicles or having other policies with them (such as a homeowners or renters policy), for taking driver education courses, qualifying as a good student, having safety devices, low mileage, and good driving records.