What Affects Your Car Insurance Premium?

When you are shopping around for auto insurance, finding the right monthly price is crucial. You are faced with a few factors that adjust your premiums. These are your insurance deductibles and any discounts you are eligible for when you apply for insurance.

Chances are when you’re speaking with family and friends about their insurance policy and how much they pay, you can either be faced in a situation where you are paying more than they are or they are paying more than you are. So how do you find out why the price is different? There are more than just the two factors above that affect your insurance premiums. Sometimes your insurance company does not want to disclose this information, but with some simple digging, we found 10 factors that directly affect your insurance premium! Read below to find out more information.

Demographic Impact

Demographics actually has a big impact on your car insurance premiums. Things like your age, gender and where you live can vary depending on these three factors. So let’s see how they can make a significant change to your insurance policy.

  • Gender
    • Depending on your gender the insurance premium you pay can vary. Crazy right? But it is solely based on statistical evidence. There are two scenarios where insurance premiums vary when compared. When comparing teenagers, it is proven that males have been involved in more accidents than females. Based on this, teenage male insurance premiums are a bit higher than females. Although on the flip side, it is proven that older female drivers get into more accidents than older men. With that in mind, older male drivers have a slightly cheaper insurance rate than older female drivers.
  • Location
    • Depending on where you live, your insurance premium can vary. If you live in a highly populated area, the possibilities are higher for an accident to happen and even potential theft to happen. Another factor to this is if you live in an area where there is high unemployment or where drivers do not have insurance, you can expect a higher insurance premium each month.
  • Age
    • Regardless of your gender, your age does significantly impact your insurance premium. Your age correlates with your experience, so as you get more driving experience you should expect your insurance premium to reduce.

These factors can greatly impact your insurance premium. So when you are shopping around for insurance quotes, keep these things in the back of your mind when getting your free quotes. There is a possibility that your free quote can fluctuate based on demographics.

Other Factors that Affect Your Premium

There are other aspects that directly affect your insurance premiums outside of demographics. These two things are the type of car you are driving and your driving habits. So how exactly does this happen?

Vehicle Impact on Insurance Premiums

Depending on the type of vehicle you drive your insurance premium can be in favor of you or increase. So if you are into exotic cars, maybe rethink that, your insurance premium can be quite expensive. But of course, let’s give some explanation to this.

  • Vehicle Safety
    • It goes without saying that some vehicles are safer than others, in this case, larger vehicles are almost always safer than a smaller vehicle. Even though the price of your insurance premium can be reduced based on this it also depends on your vehicle safety rating. If you have a vehicle with a high safety rating it is without a doubt you will have a cheaper insurance premium.
  • Type of Car
    • The type of car you drive can reduce the cost of your insurance policy. If you have a newer vehicle you are more likely to receive a a discount on your insurance premium. A lot of insurance companies actually reward you with a discount if you purchase a newer vehicle due to the safety aspect of it.
  • Engine Size
    • If you are interested in supercars or sports cars, this is something you need to know. If you are looking to ensure a car with a 4 cyl engine versus a v8 engine it will have a significant difference in your insurance premium. The vehicle with a v8 engine will increase your insurance premium more than the 4 cylinders.

Driving Habits

Your driving habits follow. So if you have ever been in a position where you have filed any claims or have had any tickets that can increase your insurance premiums. So lets take a look at what insurance companies consider.

  • Driving Record
    • If you have been in any accidents, filed insurance claims or any tickets you might be a higher risk driver than one who has a clean record. In that case, your insurance premium will be higher than usual.
  • Driving Habits
    • Some insurance companies offer you a special program where they can track your driving habits, in turn it can be beneficial for you. If you are a passive driver your insurance premium will more than likely be lower if you can prove that you are a safe driver through this program.
  • Other Factors
    • These factors do not fall under any of the categories above but here are some helpful pointers for you when they do apply.
      • Driving fewer miles per year
      • Winter tires
      • Garage Kept

These are some helpful tips for you to reduce your insurance premium.


These are some hidden factors you should know about when you are getting some insurance quotes. Its always an asset to know what you are getting yourself into when shopping. It puts you in a position as a smart shopper. You wont be blindsided when you get your insurance premium quote. So now that you have some more insight on what your insurance quote entials, why not try to get a free quote? Check out these companies below, they have some of the best rates available today. Take a look:

  • Free Quote With Geico
  • Free Quote With All State
  • Free Quote With State Farm
  • Free Quote With Liberty Mutual
  • Free Quote With Your Local Insurance Company (Most Affordable!)