6 Key Factors that Affect your Auto Insurance Premium – Know More

6 Key Factors that Affect your Auto Insurance Premium – Know More

An auto insurance applicant needs to bear a premium worth $800 on an average every year. Few individual factors leave a sharp impact on your insurance rates. The final rate is affected by a number of such risk factors. Instead of analyzing someone’s driving record, these factors help in determining risks.

Consider few key factors that help determine your premium rates:

Driving History

This is one factor that helps all drivers to determine the policy cost. If the driving history of an individual projects accidents in the past, then he’s more likely to be part of such mishaps in the future. Insurers consider you to be a lesser risk if you haven’t been through such instances and may offer lesser premium as a natural outcome. Your insurance rates are bound to be affected by certain on-road infractions like that of speeding tickets. You might need to carry a special coverage if the driving history reflects a road mishap.

Driving Frequency

Your risk of being involved in an accident tends to increase when you spend more hours on the road. Your premium costs may prove to be higher when you cover long distances in your car.  The risk element decreases in the eyes of the insurer when you drive the car for only once or twice. It has a positive impact on your premium rate. The insurance providers are known for seeking mileage each year.


A vehicle gets exposed to certain risk elements like that of vandalism when it lies parked outdoors in an open street. This, in turn, leads to a hike in insurance rates. On the contrary, rates are mostly lower for vehicles that are parked within a secured shelter. Vehicles that are parked in a garage are even safeguarded from the seasonal adversities. All of these risk factors raise the premium cost for the vehicle owner. Again, the rates of medical treatments, litigation, and fraudulent activities are higher in some states. Policyholders have to bear the cumulative cost of such incidents without any complaint.


Could your age affect what you pay for auto insurance? If you’re above 18 years of age, you’ll pose a lesser risk for your insurance provider than that of an underage driver. A driver below 18 years of age often falls under the high-risk category with most insurers. Once you turn 25, you’re likely to see a drop in your premium cost if you’re not carrying a driving offense. Special discounts are even offered to young drivers that have earned good grades for maintaining a clean driving record while they drove during school days.


An insurer arrives at the value of a vehicle by determining its risk of being stolen. Insurance rates are bound to be affected by the safety ratings of a vehicle. The premium costs are lowered by the quality of safety features installed in a vehicle. Insurance providers tend to consider the model, make, age, and size of the engine of a vehicle for determining the premium cost.


Some of the policyholders opt for comprehensive coverage and are willing to pay a few extra dollars for add-on benefits. Likewise, if an accident is caused by an insured driver, liability insurance protects the other party for property damages and medical care. The dollar limits of these policies determine the varying prices. However, it’s important that all drivers carry the minimum liability requirements set by the state.

By requesting a free quote, you’ll be able to find out the real cost of insurance with a service provider. An authorized agent will take it up from there and clarify your doubts pertaining to pricing and coverage factors.

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