How Premiums Are Determined

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• Gender: Males generally pay more than females. This is because male drivers, as a group, are involved in more accidents than female drivers.
  
  
• Age: Your age can also place you in a more expensive grouping. Drivers younger than 25 years old tend to have more accidents than drivers over 25 years old. As a result, a 17-year-old single male may pay three times as much for insurance as a 30-year-old single male. Some companies offer lower rates to those between 50 to 65 years old, since this group has lower accident rates. After age 65 rates may begin rising again.
  
  
• Marital status: Statistics show that, as a group, married drivers have fewer accidents than single drivers. Therefore, married drivers usually pay lower premiums.

There may be other factors that qualify you for reduced insurance premiums:

• Driving record: You can expect a poor driving record to greatly increase the price of insurance. Individuals with at-fault accidents or traffic convictions on their records pay more for their insurance — usually for three years following an incident.
  
  How much more these individuals pay depends on the frequency of their accidents or convictions and the type of conviction. An accident in which you were at-fault will weigh more heavily against you than a minor traffic violation.
  
  Individuals with poor driving records sometimes cannot select the company that writes their insurance. For them, there are state-regulated insurance plans — sometimes called “assigned risk plans.” Instead, the state insurance plan assigns the “risk” to an insurer.
  
  These plans guarantee that all drivers can buy the minimum amounts of insurance required by their states. The resulting coverages may sometimes be less than what is needed for full coverage. Once their driving records improve, individuals in this category should be able to get standard coverage.
  
  
• If you have not owned a vehicle for three years or have prior insurance: Some companies will rate you as inexperienced and may either refuse to insure you or charge a higher premium. Be prepared to pay higher premiums initially and ask companies how long you have to be a policyholder or have prior insurance before they will consider you experienced and lower your premiums.
  
  
• Vehicle type: Vehicles, like drivers, are grouped by risk. Statistics show which vehicles tend to be involved in more accidents, to suffer more serious damage, to cost more to repair and to be stolen more frequently. Choosing a vehicle with a poor record in these areas can more than double collision and comprehensive coverage premiums. Most companies charge more to insure high-performance vehicles and sports models due to the higher risk involved.
  
  
• Miles driven: This affects your likelihood of having an auto accident and, therefore may influence your premiums.
  
  
• State regulated rates: The way an insurance company sets rates in Florida will be different from the way it sets rates in California.
  
  
• Where you live: Those who live in a small town or suburb are generally less likely to have accidents than those living in a large city. The cost of vehicle repair, medical care and legal services differs from place to place. Insurance companies may take these things into consideration when setting rates.
  
  
• Drivers in your household: If your spouse has a poor driving record, it is likely to mean higher insurance premiums for the family vehicle, even if your driving record is perfect.