Normally, the insurance companies would have a range of insurance premium levels for each type of policy. This range would be based on several factors that are related to the applicant when the application for the policy is made. The driving habits and record of the applicant, the model and age of the vehicle, the numer of miles that had been driven, the age and the health condition of the applicant, the use of the vehicle for personal or official purposes, and the traffic violations of the applicant would be considered to decide the premium.
The state laws would generally have specific limitations on the rating factors that could be considered for fixing the premium amount. In general, the rating factors should be reasonably related to the actual risks associated with the insured person. The insurance companies should file the rating factors and the rates with the regulatory agency in every state. In certain states, the rates should be approved by the regulatory body before they could be implemented.