The VanDyke Group | Determining Your Auto Insurance Premium
Does it feel like you pay too much for your auto insurance? This article gives you the inside scoop on how the insurance carrier determines your premiums.
insurance, auto insurance, auto insurance premium, insurance premium, cost of auto insurance
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09 Aug Auto Insurance Cost: How Do They Get There?

You’re in it everyday. Your car can seem like your home. The need for insurance is a given, but how is the cost of your car insurance determined? There are many different factors involved in deciding your auto insurance premium.

Driving Record

Follow the rules of the road. A clean driving record saves you money. Avoid tickets and serious traffic violations. But, if you’re a new driver, you’re going to pay more since you have less experience.

Amount of Driving

When your boss asks if you are going to move closer to work, you might actually want to. The greater the distance that you drive every day, the more you will pay since there is a higher chance of getting in an accident.

Where you Live

Living in the city or the burbs? Living in an urban area can increase your rate because there is a higher risk of vandalism and theft.


Things get better with age and so do drivers. Drivers over the age of 25 generally are charged less than younger drivers because they have more experience behind the wheel. Full-time students however, get a good student discount if they have a B-average or above. College students get a discount if they go to school over 100 miles away and do not have a vehicle with them.


Gender can matter here. Women tend to have fewer accidents and DUI’s than men, so they generally pay less. But if you have a poor driving record, being a woman will not help you.

Type of Car

It’s all in the car you drive…well, there is some truth to that. Some cars cost more to insure due to the cost of the car, replacement costs, safety records, engine size, and whether there is a higher likelihood of theft.

Credit Score

Yes, they may look at your credit score. That giant number out in the sky can tell whether you are more likely to file a claim. They can look at your payment history, collections, and bankruptcies.

Types and Amounts of Coverage

What your state wants and what you choose to include on your insurance effects the rate. Once you have met the minimum requirements of your state you have the option to increase the coverage or add to the policy. You also choose how much deductible you want on your policy. The higher the deductible, the less you pay monthly.

You may be able to change some of these things in your favor, but some you can’t do anything about. Test the market and try different carriers to see who can get you the best cost with the most coverage.

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Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your medical professional or legal representative for information specific to your needs.