Auto Insurance Premiums

How are my Auto Insurance Premiums calculated?

Determining the actual premium for an automobile policy is somewhat complex. Premiums vary in range between insurance carriers, but they all take a number of specific details into account before quoting and issuing auto insurance coverage.

Some of the specifics that are taken into account include:

  • Drivers’ Age: Males under the age of 25 have the highest auto insurance premiums


  • Drivers’ History: The more points against your license (due to tickets, DUI’s, etc.) the higher the auto insurance premium


  • Type of Automobile: The make, model and year of your car will affect insurance premium


  • Geographical Area: Where you live will ultimately affect the insurance premium


  • Credit Rating: Not all, but some insurance companies take into account one’s credit score when calculating auto insurance premiums


Once this information is gathered (thus the laborious forms to fill out for a quote comparison), the underwriting department of the insurance company reviews and investigates the data against public records before sending it to the actuary. The actuary then analyzes the data to determine the probability of the applicant making a claim against the policy. The higher the probability of making a claim on the policy, the higher the insurance premium.

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