Insurance is an unavoidable necessity in life.  Unfortunately, it’s also costly – and when it comes to car insurance, it’s also very personal.

Your insurance rate is determined by your age, sex, driving record, and believe it or not, even the number of miles you drive each year.  Want to know what makes up that auto premium?  Read on.

Age

Young drivers pay much higher insurance rates.  As inexperienced drivers, they are statistically more likely to be involved in accidents and moving violations.  Insurance companies base their rates on actuarial information, and look for patterns in claim history amongst age groups. 

Sex

Women have fewer accidents, and less traffic tickets, so it stands to good reason that their insurance premiums are lower too.  Despite the myth that women are bad drivers, actuarial information proves otherwise.

Driving Record

If your fortunate enough to have a safe driving rating, meaning you don’t have a history of accidents or moving violations, statistically your less likely to file an insurance claim – and that means you’ll get a much lower  insurance rate too.

Miles

The less miles you drive, the less risk there is of an accident – and subsequently a claim.  So next time your shopping around for insurance, don’t inflate the miles that your actually going to be driving – otherwise, you are unnecessarily inflating your premium.

So, those are the four big factors that affect your insurance premium, but there are a few other factors that play big in the insurance premium equation too.

Marital Status

You’re not just asked your marital for statistical surveying purposes, in the insurance world, a married person may pay less than a single person with an identical driving record.

Zip Code

The neighborhood where you live makes a big impact on your chances of auto theft, so your insurance carrier will always want to know the zip code where the car is garaged.  If your neighborhood is less than desirable, expect that to make an impact on your premium.

Credit Score

It's seemingly unfair, but according to insurance experts, those who manage their finances better are less likely to file an insurance claim, so if your credit is whacked, your probably going to get whacked on your insurance too.