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Auto insurance providers have a common list of risk (rating) factors that they analyze when calculating your car insurance premium. The main risk factors are:

  • Age
  • Gender
  • Years of driving experience
  • Driving record
  • Marital status
  • Geographical location
  • Credit history
  • Geographical location
  • Annual mileage
  • Vehicle type
  • Vehicle use
  • Coverage types and limits
  • Previous insurance
  • Auto insurance providers use risk factors to calculate your premium.
  • The main risk factors are: age, gender, driving experience, driving record, marital status, geographical location, credit history and annual mileage.
  • You can't control some of the risk factors (age, gender), but you can control others (driving record).
  • Some states limit which rating factors insurers can use.

Why you need to compare car insurance companies

State can limit which factors are used for rating purposes. California, Hawaii and Massachusetts, for example, don’t allow insurance companies to use your credit information. Hawaii doesn’t allow driver age as a rating factor.

And not every factor has equal weight. Your ZIP code probably has more impact on your rates than, say, your gender.

In addition, not every insurance company will use every allowable rating factor, and each will weigh the ones it does use differently. That’s why the rates you see for the same driver might vary by hundreds or even thousands of dollars.

Some of the risk factors are under your control while others are not.You can’t control your age or gender.  But, to some extent, you can control the following items, for better or worse:

  • Driving record – the cleaner, the better
  • Location – an area with lower crime and fewer claims will get you lower rates. See CarInsurance.com’s average rates calculator to see how ZIP codes near you compare.
  • Marital status – marriage gets you a discount
  • Credit history – poor credit or no credit can bring a surcharge
  • Vehicle – similarly priced cars may have very different rates. See Insure.com’s annual comparison of new vehicles.
  • Type of use – higher mileage means more risk, and so does business use.
  • Coverage types, limits and deductibles – see what drivers like you buy and what experts recommend in Insurance.com’s Auto Insurance Coverage Calculator.
  • Previous insurance –a lapse in coverage typically will raise your rates

Your car insurance rates change over time

Change what you can to make yourself a low risk to car insurance companies, and you’ll receive lower car insurance rates. 

If there are items you can’t change right now, such as your driving record or credit history, you can work toward improving them to bring down your rates in the future. In the meantime, compare car insurance rates at each policy renewal period to find the lowest rates possible at that time.

For most drivers, time and life events have a way of bringing down car insurance rates over time. For example, novice drivers pay a big surcharge that shrinks with each passing year. It typically disappears with 10 years’ experience. (See “7 reasons your rates drop.”)