How are auto insurance premiums determined?

There are several factors that help to determine how much an insurance company charges for coverage. Many insurers have their own unique formula to calculate rates, but some of the major factors that may affect your premium include:

Age and gender
Driving history
Occupation
Make, model, and year of your vehicle
Credit history

According to insurance companies, all of these factors help insurers decide whether a driver is a low or high risk, which then determines how much he or she pays for a monthly premium. Unfortunately, some drivers end up paying far more for auto insurance than necessary, even if they have a stellar driving record.

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