Auto Insurance: How Do Providers Determine Your Insurance Rate?

Auto InsuranceYou already know, or must know by now, how important shopping around for auto insurance is so that you could secure the best possible premiums. What you probably don’t know is that auto insurance providers consider specific factors that impact how much insurance rates would be. Knowing these factors is vital, says a vehicle auto insurance firm in Harvey, Illinois.  This way, you’ll understand why your premiums might be higher or lower than you’re expecting:

Your Age

In general, less experienced, younger drivers are given higher premiums.

Your Deductible

If your deductible, which is the money you pay out of pocket if you get into an auto accident, is higher, your premium will be lower.

Your Gender

In most cases, women have lower premiums than men.


While actual risk would be determined based on your zip code, city dwellers statistically have higher auto accident rates, so their premiums are usually higher than rural residents.

Your Vehicle

Essentially, cheaper vehicles cost less to insure than high-end vehicles.

Your Credit Score

Your premiums would be higher if you have bad credit and lower if you have good credit.

Moving Violations

These would make your premiums higher, so always follow traffic rules.

Insurance Claims

The more claims you file, the higher your premiums will be.

Your Driving Habits

Your driving miles, whether you drive to work or not, as well as the distance between your workplace and home, would be factored in when establishing your premiums.

Safety Devices

These include antilock brakes, airbags, theft deterrent systems, and other devices that keep you safe while driving would reduce your premiums.

Multiple Insurance Policies

If you have several insurance policies with one insurance company, your provider might offer you discounts in the form of lower rates.

Your Payment Scheme

Some insurance providers likewise offer discounted rates according to your payment scheme. For example, you might be offered lower premiums if you pay your bill in a lump sum once a year rather than in installments.

Now that you know the standard factors that auto insurance providers use for determining your premiums, you could take the necessary steps to address factors that you could help you keep your insurance premiums on the lower end.