Car Insurance Factors That Change Your Premium

Two drivers with the same car can pay very different premiums, and the same driver can see a large change just by switching cars or moving across town. Insurers price risk using a mix of who you are, where and how you drive, what you drive and what coverage you choose. Some of those you cannot change; others you can, sometimes quickly. Rules differ by state, so treat this as a general map and check with your state's insurance department for specifics.

Each insurer builds its own rating model, and each state regulates which factors are allowed. Two companies can quote very different prices for the same driver, which is the single biggest reason to compare quotes. The National Association of Insurance Commissioners (NAIC) (opens in a new tab) links to every state's insurance regulator, where you can find local rules and complaint data.

The factors fall into five groups:

Driving record

At-fault crashes, speeding tickets, DUI convictions and license suspensions raise rates, often for three to five years depending on the insurer and state. A single minor ticket typically has a smaller effect than an at-fault crash or a serious violation.

Claims history

Insurers share claims data through industry databases. Frequent claims, even small ones, can raise your rate or affect renewal. For minor damage near your deductible, paying out of pocket is sometimes cheaper long term.

Age and experience

Inexperienced drivers, especially teens, statistically have more crashes and pay the most. Rates usually fall through the twenties and can rise again for older drivers. Some states restrict or prohibit using gender as a rating factor.

Continuous coverage

A gap in insurance, even a short one, can raise your next quote. If you are between cars, ask about a non-owner policy instead of letting coverage lapse.

• ZIP code. Local crash frequency, theft, vandalism, repair costs, litigation rates and weather all feed into your rate. Moving a few miles can change it.
• Where the car is parked overnight. A locked garage can help compared with street parking.
• Annual mileage. More miles means more exposure. If your mileage has dropped (for example, after a job change), tell your insurer.
• Use. Commuting, business use and rideshare driving are priced differently. Rideshare and delivery work often need an endorsement; personal policies may exclude it.
• Usage-based programs. Telematics apps or plug-in devices track braking, speed, time of day and phone use. Safe drivers can save; risky patterns can raise rates with some insurers. Read the terms before enrolling.

When you are shopping, the car is one of the easiest factors to control.

Repair cost

Collision and comprehensive premiums depend on what the car costs to fix. Expensive parts, aluminum body panels, large sensors and cameras in bumpers and windshields, and specialized repair procedures push premiums up. Many EVs and luxury models fall into this group.

Theft risk

Models that are frequently stolen, or whose parts are, can cost more to insure for comprehensive coverage. Factory immobilizers and anti-theft devices may earn a discount.

Injury claims and safety

Insurers look at how often a model's occupants file injury claims. Strong crash-test results and crash-avoidance features can help, depending on the insurer. Check NHTSA 5-Star ratings and recall history for any model year on our research pages.

Performance

High-horsepower trims typically cost more to insure than base trims of the same model.

This is the factor you control most directly.

• Liability limits. Every state sets minimums, but minimums are often far below what a serious crash can cost. Higher limits cost more but protect your assets. Check your state's DMV or insurance department for its requirements.
• Collision and comprehensive. Pay for damage to your own car. Lenders require them on financed or leased cars. On an older, low-value car, the premium plus deductible can approach what the car is worth; at that point, dropping them may make sense.
• Deductibles. A higher deductible lowers the premium. Choose one you could pay tomorrow without hardship.
• Uninsured/underinsured motorist coverage. Required in some states and valuable everywhere.
• Add-ons. Rental reimbursement, roadside assistance, gap insurance and new-car replacement all add cost. Gap insurance is often cheaper from an insurer than from a dealer.

In most states, insurers can use a credit-based insurance score, which is built from your credit report but is not the same as a lending credit score. Some states, including California, Hawaii and Massachusetts, ban or tightly restrict its use for auto insurance, and others limit how it can be applied. Under federal law, if an insurer takes an adverse action based on your credit information, it must tell you. The FTC explains your rights around credit reports and how they are used (opens in a new tab).

• Compare quotes at every renewal, and whenever you move, add a driver or change cars. Use the same coverage limits for a fair comparison.
• Raise your deductible if you have the savings to cover it.
• Bundle auto with home or renters insurance.
• Ask about discounts: safe driver, good student, defensive driving course, low mileage, multi-car, paid-in-full, paperless, autopay, anti-theft, professional or alumni groups.
• Drop collision and comprehensive on an old car when the cost no longer makes sense against its value.
• Report lower mileage if your driving has changed.
• Keep coverage continuous and keep your record clean.
• Review drivers on the policy; remove anyone who no longer drives the car (and confirm with the insurer that you can).
• Price insurance before you buy a car, and include it in your cost-of-ownership and cost-per-mile estimates.

• Find your declarations page.
• Confirm listed drivers, vehicles, garaging address and annual mileage are correct.
• Check liability limits against what you would want after a serious crash.
• Check deductibles against your emergency savings.
• Decide whether collision and comprehensive still make sense for the car's age.
• List discounts you qualify for and confirm each is applied.
• Get at least two comparison quotes with identical coverage.