The Top 15 Factors That Affect Car Insurance Rates

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

Which rating factors go into car insurance prices?


A rating factor is a 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 $4,321 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
Car Insurance CompanyAvg. Annual Premium — Teen DriverAvg. Annual Premium — Driver Aged 50-59
Allstate$6,442$1,768
Farmers$6,518$1,402
GEICO$3,508$1,065
Liberty Mutual$6,559$1,746
Progressive$8,248$1,403
State Farm$5,820$1,485
USAA$2,864$845

Age becomes a less prominent rating factor at the age of 20, and even less impactful at the age of 25. Learn more about cheap car insurance for teens.




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.


INSURANCE PREMIUMS BY VIOLATION TYPE
Car Insurance CompanyAvg. Annual Rate With Speeding TicketAvg. Annual Rate With DUIAvg. Annual Rate With Reckless Driving
Allstate$2,415$3,637$3,388
Farmers$2,045$3,239$4,636
GEICO$1,442$2,550$2,238
Liberty Mutual$2,177$4,182$3,459
Nationwide$1,469$2,691$2,508
Progressive$2,103$2,201$2,457
State Farm$2,130$3,854$2,895
USAA$1,129$1,952$1,472

For more information regarding car insurance with violations, see our guide here.




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.


INSURANCE PREMIUMS BY CREDIT HISTORY
Car Insurance CompanyAvg. Annual Rate — Worst Credit LevelAvg. Annual Rate — Best Credit Level
Allstate$3,117$1,743
Farmers$2,633$1,354
GEICO$2,051$1,064
Liberty Mutual$3,228$1,792
Nationwide$1,593$1,037
Progressive$3,602$1,320
State Farm$3,522$1,260
USAA$2,682$1,262

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, Michigan, a 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 typically $1,500 per year more 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 GroupAverage Annual Premium
Female Teen Driver$2,489
Male Teen Driver$2,798

For more information regarding gender as it relates to car insurance, see our guides:




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 60 months of consecutive coverage: $2,643 per year.


INSURANCE PREMIUMS BY INSURANCE HISTORY
Number of Months with Prior CarrierAverage Annual Premium
0$4,046
6$1,488
12$2,483
24$4,896
36$1,545
60$1,403



8. Annual mileage


Annual mileage has a major bearing on insurance premiums. To an insurer, it’s simply a matter of probability: the more time you spend on the road, the higher your chances of being in an accident. As such, there’s nearly a $100 annual premium difference between clients who drive less than 7,500 miles per year and those who drive more than 15,000.


INSURANCE PREMIUMS BY ANNUAL MILEAGE
Car Insurance CompanyAverage Premium — 0-7,500miAverage Premium — +15,000mi
Allstate$1,855$1,981
Farmers$1,547$1,673
GEICO$1,120$1,227
Liberty Mutual$1,799$1,990
Nationwide$1,159$1,159
Progressive$1,666$1,666
State Farm$1,448$1,613
USAA$954$1,022



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 PREMIUMS WITH AN AT-FAULT CRASH
Car Insurance CompanyAverage Annual Rate After At-Fault Accident
Allstate$3,006
Farmers$2,334
GEICO$1,857
Liberty Mutual$2,776
Nationwide$1,836
Progressive$2,720
State Farm$2,849
USAA$1,304

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.


INSURANCE PREMIUMS BY COVERAGE LEVEL
Car Insurance CompanyState Minimum (Liability-Only)50/100/50 (Full Coverage)100/300/100 (Full Coverage)
Allstate$880$1,920$2,021
Farmers$648$1,562$1,647
GEICO$488$1,204$1,289
Liberty Mutual$873$1,947$2,074
Nationwide$508$1,159$1,237
Progressive$703$1,666$1,799
State Farm$773$1,613$1,731
USAA$385$995$1,046



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).





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 personalized rates from local and national companies today!



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Methdology and disclaimer


Methodology is included in our State of Insurance report.

Disclaimer: Every state is subject to specific legislation and every carrier has its own policies. Our car insurance rating factors are a composite average of the most common factors, but are not reflective of every state or carrier.