The Top 15 Factors That Affect Car Insurance Rates

What factors influence car insurance prices? Let's review the most important aspects of your insurance profile.

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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. Put simply, the less risky your rating factors, the cheaper your car insurance. Some auto insurance rating factors — such as driving record or vehicle type — have relatively large impacts on car insurance costs. Others — like gender or marital status — are less important. Below are the 15 rating factors most often used by car insurance companies, along with associated costs by insurer.

 

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 $1,299 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.

INSURANCE PREMIUMS BY AGE
Insurance Provider6-month premium — Teen Driver6-month — 50-yo
Allstate$1,851$874
Farmers$1,272$650
GEICO$1,170$577
Liberty Mutual$1,472$677
Nationwide$1,108$575
Progressive$1,360$658
State Farm$1,247$607
USAA$752$418
Average$1,279$630

Age becomes a less prominent rating factor at the age of 20, and even less impactful at the age of 25. Learn more about car insurance based on your age below:

 

2. Driving 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 16-20 miles per hour over the limit), a DUI, and a reckless driving charge may impact insurance premiums.

average premium by violation type

3. Credit score

Credit is a major — but often overlooked — rating factor. Data from the Federal Trade Commission show 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 $1,450 annually. This comes out to a $744 increase for a 6-month policy or $124 a month.

INSURANCE PREMIUMS BY CREDIT HISTORY
Insurance Provider6-month premium — Very Poor Credit

6-month premium — Great Credit

Allstate$1,597$850
Farmers$1,180$668
GEICO$1,130$599
Liberty Mutual$1,823$698
Nationwide$934$586
Progressive$1,647$639
State Farm$1,512$536
USAA$1,128$427
Average$1,369$625

In the above table, "worst credit" is defined as a credit rating between 300 and 579. A "best credit" rating sits between 800 and 580. For more information on car insurance premiums by credit level, see our guides below.

 

4. Years of driving experience

This rating factor is simple. The more experience you have behind the wheel, the less likely you are to make the mistakes that lead violations and claims. For an insurance company, this means you’re less risky of 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.

 

5. Location

Location functions as a rating factor on two levels: state and zip code. Car insurance is regulated at the state level and subject to each state's regulations. For example, Michigana no-fault state, requires all drivers carry unlimited Personal Injury Protection (PIP) coverage by law. This makes car insurance exceedingly expensive because of the cost of PIP coverage and the additional cost of “unlimited" coverage that is passed to insurers. Car insurance costs in Michigan are as much as $1,500 per year more expensive than in Ohio, a neighboring state.

Car insurance is also priced by location at a more granular level. Car insurance is priced by zip code to help insurance companies adjust for the external rating factors associated with your neighborhood. Insurance costs are higher in areas with more drivers. This is true of zip codes prone to floods, wildfires, crime, or other risks covered by your car insurance.

 

6. Gender

Another lesser-known risk factor, gender primary impacts rates for young drivers. On average, a male teen driver pays $308 more per year than does 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.

INSURANCE PREMIUMS BY AGE & GENDER
Gender and Age Group6-Month Premium
Female Teen Driver$1,245
Male Teen Driver$1,399

 

7. Insurance history

Unless you are a brand new driver, insurance companies see a lack of continuous coverage as a major risk factor. In an insurance company's estimation, if you were licensed but didn't have insurance, you were most likely driving uninsured. The below data show the difference between drivers with no previous coverage and five years of consecutive coverage: $119 per year.

average 6-month premium by insurance history

 

8. Annual mileage

Annual mileage has a major bearing on insurance premiums — in California. 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 $42. But in California, this difference is nearly 26% — or $436 per year. Below is the US average by mileage driven.

average 6-month premium by annual mileage

9. Marital status

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.

 

10. Claims history

Every single insurance company sees 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 from popular insurance companies across the U.S. after an at-fault accident.

Insurance ProviderNone6-month premium
Allstate$993$1,425
Farmers$781$1,010
GEICO$602$934
Liberty Mutual$769$1,181
Nationwide$667$859
Progressive$777$1,343
State Farm$665$802
USAA$458$607

For more information on how claims impact car insurance rates, see our guide here.

 

11. Coverage level

The more coverage you have, the more expensive it will be. The price difference between the lowest levels of car insurance coverage and the highest is nearly $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.

average premium by coverage level

 

12. Vehicle

Insurance rates on a brand new sports car will be more expensive than premiums for a 1999 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). Click here to find more information for rates by vehicle type.

 

13. Vehicle ownership status

Car insurance companies categorize car ownership in three ways: owned, leased, and financed. Premiums vary by ownership status.

For more information, see our guides to each of these stages:

 

14. Discount options

Auto insurance discounts depend on your location and insurance company, and many are reflections of your individual rating factors. If you’re a homeowner, pay your insurance premium upfront, or have a clean driving record, you might qualify for a discount. Below are some common discounts.

Learn more about common car insurance discounts.

 

15. Insurance company

The biggest factor in determining auto insurance costs is the insurance company. Rates vary substantially from company to company. While the rating factors that comprise your driving profile can raise your rates, you could be paying too much for car insurance simply because your current company is too expensive. Shop around with as many companies as possible using your individual rating profile to find the best possible rate for you.

Enter your zip code below to see quotes from top insurance companies today!

 

Find an affordable policy today!

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Methodology and disclaimer

 

Full methodology is available in our State of Insurance report.

Disclaimer: Every state is subject to specific legislation and every carrier has its own policies. Our car insurance prices come from composites of the most common factors and are not reflective of every state or carrier.