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These factors are setting your auto insurance rate

July 29, 2015

Auto insurance policies are not black and white, as there are many factors that are considered when setting your monthly premium. If you are under the impression that the make and model of the vehicle, along with your driving history, are the only factors establishing your monthly insurance costs, then it's time you think again.

Know the factors setting your auto insurance costs.

Here are some of the factors that are taken into consideration when setting your auto insurance costs.

"Certain types of cars are more of a liability for insurance providers.”


If you live in a place that is more prone to accidents, then your rate is likely to be higher. Additionally, if the area in which you live is known for its crime rate, then that will also up your monthly costs. But location also means how far you travel each day. Do you drive to work every day? How far is the distance? This can play a big role in your cost. Essentially, the more time you spend in your car, the higher your chance of getting in an accident, and the stricter insurance companies will be.

Credit score

Believe it or not, insurance companies take a look at your credit score when setting your insurance premiums. You might think it is odd because paying your bills on time has little to do with driving behavior. But insurance companies like to have a complete picture of the individual they are insuring. Typically, higher credit scores are met with lower premiums. This is not a hard and fast rule, but a commonality that happens often enough it is worth mentioning.

Type of car

You knew this was going to be on the list, but you might not completely understand why. Certain types of cars are more popular among thieves, which makes them more of a liability for insurance companies. Similarly, some vehicle models have lower safety ratings than others. If a vehicle has a low safety rating, then the chances of something going wrong or an accident occurring are higher. On the other hand, cars that have many modern safety features are viewed more kindly by insurance providers, since the car is designed to better protect the passengers.

Some factors have more weight on your insurance costs than others.Your driving record plays a role in setting your policy price.


Similar to a credit score, insurance companies like to have a complete picture of you before they agree to insure you. What type of job you have can provide some insight as to how careful of a driver you are. Additionally, some jobs are on the road more than others, which means they are at greater risk for an accident. Journalists are an example of professionals who are constantly on the road. Because of this, their premiums are likely to be a bit higher.

Driving record

Don't forget one of the biggest factors in setting your insurance policy, which takes into account your entire driving history. This is the best way for an insurance provider to gauge how good of a driver you are and how much is necessary to include in your coverage. Your age is also considered, as it determines how long you have been driving. For example, if you receive three tickets in four years as opposed to three tickets in eight years, the insurance company will look more favorably on the longer time span scenario.

If you are purchasing a new car, or considering updating your auto insurance, then don't be afraid to get multiple quotes and ask questions of the provider. Insurance carriers want to know who they are dealing with and so the more upfront and approachable you are, the better you can understand what is going into your insurance policy.