We bet you’ve wondered how car insurance premiums are calculated. Do you ever have discussions with friends of similar age and driving history and find you’re all paying very different premiums for what would appear to be similar coverage?
Insurance premiums are based on many factors, all of which play a role in your total premium for your auto insurance. A single difference of any of these can give dramatically different outcomes. Some factors insurance companies use to calculate premium include:
- Gender, age and marital status
- Your driving history
- Your claim history
- The zip code where the vehicle is garaged
- Your credit score
- How many miles you commute
- Whether you have other policies with the same insurance company, such as home or renters insurance
- If you’re currently insured
- The types of coverage and limits you want
- The limits you had on your previous insurance policy
- The type and age of vehicle (think safety equipment)
Insurance companies do their best to determine a premium for your unique situation while calculating a premium that will be profitable for them. It may surprise you to know that many insurance companies try to earn just a few cents on each dollar of premium they collect.
You can improve your odds of getting good auto coverage at a low rate by calling a local independent insurance agent who represents multiple insurance companies. Our personal insurance advisers can give you comparison quotes for your auto insurance.