Car insurance isn’t just important; it is a legal necessity in most states. There are dozens of options for insurance. The quotes you receive may be very different than what your best friend or family member is paying. Where do those variations come from? Insurance companies weigh several aspects when creating your rate.

Vehicle Type

The make and model of your vehicle will affect your monthly premiums. Expect the cost of insuring a Chevy Malibu to be less than insuring a Ferrari Roma. Insurance is a numbers game. The more expensive your vehicle is, the greater the cost will be to repair or replace it. Companies pass that risk on to clients by charging higher fees. Models that are considered high risk for theft also bear elevated premiums.

Age of Vehicle

There’s a misconception that newer vehicles are always the most expensive to insure. The inflated purchase price of a brand new vehicle will increase your insurance rate. However, older models may have disproportionately elevated costs. Cars that have aged into the need for pricey aftermarket parts or lack advanced safety features endure raised premiums. 

Planned Use

Two usage factors influence car insurance.


Spending more time driving increases your chance of being in an accident due to increased exposure. That means the further you drive each year, the more you will pay for insurance. 


Your insurance company may inquire if you are driving for work or leisure. Leisurely driving generally comes with a lower price tag than commuter coverage. If you use your vehicle for your job itself, you’ll qualify for commercial coverage at an even higher cost.

Driving History

Insurance agents will look at your driving history from the last three to five years. Records show everything from speeding tickets to accidents and minor infractions to DUIs. Drivers who are deemed high-risk may be denied coverage or charged extra.

Driver Characteristics

Multiple demographic characteristics play a role in rate determinations. 


Individuals between the ages of 25 and 65 often have a lower bill. Teens and young adults are considered more high-risk due to a lack of experience. An increase in accidents occurs again during senior years. Older adults are also more likely to endure serious injury in a crash.


Car insurance rates have a gender gap that varies over time. Males in their teens are subject to the highest rates. Both genders equalize in costs around 30 years old, but men’s rates will continue to drop until they pay less on average.

Marital Status

If you’re married, make sure your insurance company knows. Statistics will work in your favor to help lower your rates. Married drivers are involved in half as many accidents.

Geographic Location

Your zip code is very important to your insurance company. Rural areas are associated with less traffic, fewer accidents, and a lower occurrence of crime. The decreased risk is passed on to you in savings.

While each company uses these factors in determining your quote, they may weigh their importance differently. It is smart to shop around for the best rates and coverage.