The answer varies from company to company, but generally speaking all insurance carriers look at several common factors.
TICKETS AND CLAIMS
It only stands to reason that people with less-than-perfect driving histories pay more than those who keep their records clean. Collision claims or liability claims when you’re found at fault can affect your rates later, particularly if they’re for large amounts. Conversely, comprehensive claims – such as for glass repair – and liability claims when you’re not at fault may not affect you at all.
Tickets and judgments also affect your insurance premiums. Major offenses such as DUIs often have a substantial impact, up to and including non-renewal. The up side is these blemishes are usually disregarded by underwriters after three to five years, so even someone with a horrible driving history has an opportunity get back to a clean record in the insurance company’s eyes.
Younger drivers can expect to pay more just about anywhere regardless of driving history. Rates for single male drivers under 18 tend to be particularly high. However, once you reach your 25th birthday, you can generally count on your insurance premiums to go down. Rates tend to creep up again for drivers over 60.
THE AUTO ITSELF
What you drive is often just as important as your own driving history. Sports cars, luxury vehicles and autos with poor safety reputations can cost significantly more to insure than a standard four-door sedan. In other words, it’s a good idea to check rates with your agent before you take delivery on that Corvette.
Many companies won’t take a new driver until he or she has established an insurance history. If you’re getting auto insurance for the first time, or if you’ve been without it for an extended period, you may find yourself placed in a non-standard or high risk company. However, in many cases you can move to a more inexpensive standard company after six months assuming you maintain a clean driving record.
LOCATION AND DRIVING HABITS
Many companies assign different rates by ZIP code or by county based on their claims history in that particular locale. Usually drivers in the city will pay more than their rural neighbors. Some companies also take the distance you drive to work or school into consideration. Those who drive further pay more.
Insurance actuaries (the people who come up with these rates) will often tell you that people who maintain good credit are better risks than those who don’t. Most insurance companies run a modified credit check on applicants during the underwriting process. Some companies will weight a score based on age. In other words, a 30-year-old may get a better discount than a 50-year-old with identical credit.
Many companies want all your insurance business; among other things they figure you’re less likely to shop around and leave them later if they insure your home too. As such, many are willing to give you a break on your auto insurance if you package it with your homeowners insurance or with other insurance lines. Teenage drivers can also get a break with some companies if their parents are customers too.
Remember actual auto insurance premiums – and the factors that determine them – often vary greatly from company to company. For example, some companies want to know where you park your car at night. Others don’t care in the slightest. The only way to know for sure is to contact several local insurance agents and/or go online to compare rates for yourself.