Factors Affecting Car Insurance Rates
What factors influence car insurance rates? Read on to review the rating factors that comprise insurance policy pricing, or enter your ZIP to compare rates.
What factors are most important for car insurance rates?
A rating factor is an individual characteristic of a customer used to price car insurance premiums. Common rating factors include age, location, driving history, credit score, and more. Put simply, the less risky your rating factors are, the cheaper your car insurance policy will be. Some auto insurance rating factors — such as driving record or vehicle type — have relatively sizeable impacts on car insurance costs. Others — like gender or marital status — are less important.
Below are the nine rating factors most often used by car insurance companies.
Rating factors based on the driver
Personal details about a driver are considered by insurance companies as paramount to understanding the risk they pose. These factors may change over time, but some are harder to manipulate than others.Â
1. Age
Age is a very significant rating factor, especially for young drivers. Between the most expensive insurance premiums — paid by teen drivers — and the most affordable — paid by 50-year-olds — is a cost gap of over $5,500 per year. Insurance companies view teen drivers as very risky and potentially expensive clients to insure. Data show that teen drivers drive more recklessly and get into more accidents than do drivers in any other age group.
Updating data...
| Age Group | Avg. Monthly Premium | Avg. Annual Premium |
|---|---|---|
| 20s | $190 | $2,284 |
| 30s | $145 | $1,744 |
| 40s | $139 | $1,667 |
| 50s | $130 | $1,555 |
| 60s | $131 | $1,571 |
| 70s | $151 | $1,807 |
| Teens | $420 | $5,039 |
Source: The Zebra
The Zebra’s Dynamic Insurance Rating Tool data methodology
The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.
The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.
For a comprehensive understanding, see our detailed methodology.
Age becomes a less important rating factor at the age of 20, and even less impactful at the age of 25. Auto insurance premiums reach their low point in a driver's mid-50s before rising for older drivers aged 70-plus.
2. Driving and claims history
This rating factor is straightforward. Car insurance companies see a driver's past as an accurate predictor of their future performance. A history of tickets or violations will inflate the cost of current and future insurance premiums. The below data show how a speeding ticket (speeding 16 to 20 miles per hour over the limit), a DUI, and a reckless driving charge may impact insurance premiums.
Every single insurance company views a long claims history as a red flag. Included in your claims history is any insurance claim you file — and any claim filed against you. If your insurance company pays out a claim, you should expect your rate to increase. Below are estimated rates after claims
Similarly, years of driving experience matter
This rating factor is simple. The more experience you have behind the wheel, the less likely you are to make the mistakes that lead to violations and claims. For an insurance company, this means you’re less risky as a client. Drivers with many years of experience typically enjoy lower insurance prices than do newer drivers. Learn more about finding affordable car insurance as a new driver.
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| Violation type | Avg. Annual Premium |
|---|---|
| None | $1,759 |
| Texting while driving | $2,140 |
| Speeding in school zone | $2,157 |
| Speeding | $2,188 |
| Accident | $2,429 |
| Reckless driving | $3,187 |
| Racing | $3,291 |
| DUI | $3,441 |
Source: The Zebra
Updating data...
| Accident/violation | Avg. Annual Premium |
|---|---|
| None | $1,759 |
| One Med/PIP claim | $1,769 |
| Two Med/PIP claims | $1,847 |
| One comp claim | $1,849 |
| Two comp claims | $1,936 |
| At-fault accident | $2,429 |
Source: The Zebra
3. Credit score
Credit is a major — but often overlooked — rating factor. Data shows drivers with poor credit file more claims than do drivers with better credit. And when they do file claims, they are generally more expensive than claims from drivers with good credit. The difference in car insurance rates between drivers with the lowest level of credit and the highest is over $1,500 annually. This comes out to a $784 increase for a six-month policy or $130 a month.
Good news for drivers in California, Hawaii, Massachusetts, and (to some degree) Michigan: these states have outlawed —or severely restricted — the use of credit score as a rating factor in auto insurance policies.
Updating data...
| Credit Tier | Avg. Monthly Premium | Avg. Annual Premium |
|---|---|---|
| Poor | $262 | $3,147 |
| Fair | $173 | $2,071 |
| Average | $159 | $1,913 |
| Good | $147 | $1,760 |
| Very Good | $136 | $1,627 |
| Excellent | $125 | $1,506 |
Source: The Zebra
In the above table, "poor credit" is defined as a credit rating between 300 and 579. A "best credit" rating sits between 800 and 850.
4. Location
Location affects car insurance rates at both the state and ZIP code levels. State regulations play a significant role; for instance, Michigan, a no-fault state, mandates unlimited Personal Injury Protection (PIP) coverage, making insurance expensive. Rates in Michigan exceed $2,000 annually, much higher than in nearby Ohio.
Insurance companies also price policies by ZIP code, accounting for local risks. Areas with more drivers or higher risks from natural disasters or crime tend to have higher rates. Generally, rural areas have lower premiums than do their urban counterparts. See average rates by state in the table below, or read our handy guides to car insurance by state or by city.
Source: The Zebra
5. Other personal demographics
Insurance companies also may take gender, marital status, and occupation into account when rating policies, but these factors are weighed less heavily than the factors outlined above. Still, it's worth looking at how average premiums compare with these factors in mind.
Gender primarily impacts rates for young drivers. On average, a male teen driver pays $754 more per year in auto insurance premiums than a female teen driver. Again, this is because car insurance companies see young male drivers as more likely to take risks than their female counterparts.
Marital status has a minor effect on auto insurance rates. Historical data show married drivers share driving duties, filing fewer individual claims. The difference between car insurance rates for married, divorced, single, and widowed drivers is minimal.
Your profession typically has very little effect on your car insurance rates, but some companies associate certain occupations with less risky driving. Additionally, some professional organizations partner with insurance companies to secure more favorable rates.
"Unfortunately, your rate can still increase due to uncontrollable outside factors. This is because insurance rates are determined by your "risk pool," which includes everyone in your area. If others in your pool are filing claims, you will be associated with the same risk level, leading to possible rate hikes. Insurance carriers look after their loss-to-income ratio, and if their losses rise, they apply an area-wide premium increase to all customers."
Hunter Black — Sales Manager at The Zebra
Rating factors based on the vehicle
Unlike personal rating factors, vehicle-based factors are easier to change if rates are too high. Driving a sensible car, adjusting coverages and deductibles and paying off your vehicle can all help lower auto insurance premiums.
6. Coverage levels and deductiblesÂ
The more coverage you carry, the more expensive your premiums will be. The cost difference between the lowest levels of car insurance coverage and the highest can add up to more than $1,000 annually. The reason for this is simple: if you carry more coverage, your insurance company is obligated to pay out to meet a higher coverage limit.
Updating data...
| Coverage | Avg. Annual Premium |
|---|---|
| Liability only | $597 |
| Full coverage w/$1,000 deductible | $1,554 |
| Full coverage w/$500 deductible | $1,760 |
Source: The Zebra
See our guides to car insurance deductible amounts below:
7. Vehicle type
Insurance rates on a brand new sports car will be more expensive than premiums for an old Civic. If a vehicle costs more to replace, the insurance company will charge you more each month to cover these potential costs (via collision and comprehensive coverage). Find car insurance rates by vehicle type.
8. Annual mileage
Annual mileage has a major bearing on insurance premiums. The national difference in annual premium for drivers who travel fewer than 7,500 miles per year versus those who drive 15,000-plus miles annually is $92. According to our data, 45% of Zebra customers drive less than 7,500 per year.
Updating data...
| Annual Mileage | Avg. Annual Premium |
|---|---|
| 0-7500 | $1,710 |
| 7501-10000 | $1,760 |
| 10001-15000 | $1,795 |
| 15001+ | $1,826 |
Source: The Zebra
For more information on how annual mileage affects car insurance rates, see the related articles below.
Average car insurance rates by top companies
Based on our standard driver profile of a 30-year-old single male with no accidents driving a 2015 Honda Accord (see our methodology), we've compiled average rates from top insurance companies. Or, use our car insurance calculator below to estimate what you should be paying.
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| Company | Avg. Annual Premium | Avg. Monthly Premium |
|---|---|---|
| Allstate | $2,566 | $214 |
| Farmers | $1,926 | $161 |
| GEICO | $1,664 | $139 |
| Nationwide | $1,666 | $139 |
| Progressive | $1,911 | $159 |
| State Farm | $1,748 | $146 |
| USAA | $1,451 | $121 |
Source: The Zebra
Fetching your estimate
Here at The Zebra, we make it easy for you to find the right coverage—at the right price. We compare top companies so you can find what works for you.
We can also help you:
How to save on car insurance
While you can't always change the details about you that insurance companies use to rate policies, you can practice smart habits when it comes to understanding your insurance policy and how to lower your premiums.
The biggest factor in determining auto insurance costs is the insurance company you decide to go with. Rates vary substantially from company to company and while there are other factors that comprise your driving profile, you could be paying too much for car insurance simply because your current company is too expensive. Let the Zebra help you gather quotes from as many companies as possible using your individual rating profile to find the best possible rate for you.
Unless you have accident forgiveness, every car insurance company will raise your rates after you file a claim. Most insurance companies will keep up-charging your premium for three years following an accident. This will cause the overall rate increase for one at-fault accident to equal well over your original premium. If you can afford to pay out-of-pocket for repairs (and the amount paid is about equal or lesser than your deductible), it may be worth it to explore that option instead of filing. For more information, see when and how to file a claim.
Vehicles depreciate rapidly, so if you own a vehicle worth less than $4,000, you might not need collision and comprehensive coverage — which can save you a lot of money! These coverage options are designed to protect your vehicle from property damage. However, if your vehicle isn’t worth much, you might be paying for coverage you do not need.
The key point here, though, is to have consistent coverage. If you’re going to sell your vehicle, you should consider buying a non-owners policy. A non-owner car insurance policy only provides liability coverage for drivers who do not own a car but want to maintain their insurance coverage. This will not only keep you continuously insured but offer you additional liability insurance when you’re driving.
Discounts can help lower rates, but usually not drastically. Still, checking out discounts you may qualify for is always worthwhile. The most common discount available is a multi-policy discount. You earn this when you bundle two or more policies with the same insurance provider. Other common discounts include:Â
- Good driver discount
- Paperless discount
- Payment by bank account
- Paid in full discount
- Multi-car discount
- Good student discount (under 25)
- Telematics discount
Frequently asked questions — factors affecting car insurance
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.