Thirteen Factors impacting your auto insurance premium


Various factors affect your insurance premium, and you need to dig deep and understand them in order to be able to save on your insurance premium. 

Age and Gender 

The younger you are, the higher your premium will be, up to a certain age of course. Drivers under the age of 25 are statistically much more prone into getting into an accident than someone in their 40’s. Your gender also matters here; males attract a higher premium as compared to females. This is based on the assumption that women are safer drivers, a thought which is fast changing as the world sees both genders as equal. 

Marital status 

A married person tends to be more dependable and drive in a more sedate manner than a youngster, or even an unmarried person of the same age group. Hence insurance companies charge a higher premium for single people. 

Credit rating 

Like with most financial institutions, auto insurance companies want to ensure their Customers’ have good credit. 

Driving violations 

Everything from an accident, to a DUI, to a simple speeding ticket goes on your record for up to five years! When you apply for a new policy, the insurance company will dig out your driving history and your past accident claims, and if you have a less than perfect driving history, your premium will spike up. 

Occupation, Education 

Statistically someone who uses their motor vehicle to travel from one place to another for business is far more prone to make a claim than someone who just travels to work and home. A person who has completed college, will be more likely to drive safe than someone who has not completed high school. 

Driving experience 

Someone who has been driving for a decade or so, will be a much safer bet for the insurance company than someone who has been driving for just a year. 

Vehicle brand and model 

A cheap car’s insurance premium is considerably lower than that of a massive SUV, or a zippy sports car. 


The street you live on and the town in which that street lies in also affect your premium. A person living in the country side will pay much less than someone who lives in the city. Some neighborhoods are known for high rates of motor vehicle theft, and if you reside in such a neighborhood your premium is likely to soar. 

Your current auto insurance policy 

The validity and extent of cover of your current auto insurance policy, also plays a role. If you don’t have valid insurance, the premium on your new policy will be higher. 

Multiple cars 

A person, who has 3 motor vehicles, will use each vehicle much less as compared to someone who has one motor vehicle. 

Business use of the vehicle 

If the vehicle is being used for business purposes; what kind of usage does it entail? A vehicle being used for business stands to be a higher risk, as its operating hours are longer, and multiple people utilize the vehicle. 

Distance driven in a year 

The more you drive, the higher the chances of a road accident, and this obviously will attract a higher premium. Many insurance companies also offer discounts to people who drive less than a pre-defined number of miles. 

Theft protection 

If you have theft protection for your car in the form of an alarm system, you can often get hefty discounts on your premium.