What Factors Affect My Car Insurance Premium? 2026

Top 10 Factors Ranked by Impact

Here are the most important factors, ranked by their typical weight in premium calculation:

1. Driving Record (Weight: 25–40%)

• Biggest factor in determining your rate
• At-fault accidents: +20–50% premium increase
• DUI/DWI: +80–200% increase
• Speeding tickets: +10–25% per ticket
• Clean record discount: 15–25% savings

2. Age and Driving Experience (Weight: 15–25%)

• Teens (16–19): 300–400% above average
• Young adults (20–24): 150–200% above average
• Adults (25–65): Lowest rates
• Seniors (65+): 10–20% increase

3. Location/ZIP Code (Weight: 15–20%)

• Urban areas: 30–60% higher than rural
• State averages: $890/year (Maine) to $2,610/year (Michigan)
• ZIP code variations: 200–300% within same city
• Factors: Crime rates, traffic density, weather, uninsured drivers

4. Vehicle Type and Value (Weight: 15–20%)

• Safety ratings: High IIHS ratings = 10–15% discount
• Theft risk: High-theft models = 25–50% higher
• Repair costs: Luxury/imported = higher premiums
• Sports cars: 50–100% premium increase

5. Credit Score (Weight: 10–20%)

• Excellent (750+): Baseline rates
• Good (700–749): +10–15%
• Fair (650–699): +20–30%
• Poor (<650): +40–100%
• Note: Banned in CA, HI, MA, MI

6. Coverage Levels and Deductibles (Weight: 10–15%)

• State minimum vs. 100/300/100: +40% cost
• $500 vs. $1,000 deductible: 15–25% savings
• Adding comp/collision: +40–60% premium

7. Annual Mileage (Weight: 5–10%)

• <5,000 miles/year: 10–20% discount
• 12,000–20,000: +10–15%
• 20,000+: +20–40%

8. Gender and Marital Status (Weight: 5–10%)

• Male <25: 10–20% higher than females
• Married drivers: 10–15% discount
• Note: Gender-based pricing banned in some states

9. Prior Insurance Coverage (Weight: 5–10%)

• Continuous coverage: Standard rates
• Lapse 1–30 days: +5–10%
• Lapse 60+ days: +30–50%
• No prior insurance: +40–75%

10. Occupation and Education (Weight: 3–7%)

• Lower-risk jobs (teachers, engineers): 5–10% discount
• Higher-risk jobs (delivery drivers): +10–20%
• College degree: 5–15% discount

These factors combine to create your unique rate. A 40-year-old engineer with excellent credit and a clean record pays 70–80% less than an 18-year-old with a speeding ticket and fair credit—for the exact same coverage.

Factors You CAN Control

Good news: You have direct control over many major rating factors.

1. Driving Record (25–40% impact)

What you can do:

• Drive defensively and avoid all violations
• Never drive under the influence
• Use cruise control to avoid speeding tickets
• Take defensive driving courses

Impact: Maintaining a clean record saves $1,000–$3,000/year for high-risk drivers.

2. Vehicle Choice (15–20% impact)

What you can do:

• Choose vehicles with high safety ratings
• Avoid sports cars, luxury brands, and high-theft models
• Buy vehicles with advanced safety features (automatic braking, lane assist)
• Consider older, less valuable vehicles (liability-only coverage)

Impact: A Honda Civic costs 30–50% less to insure than a BMW 3-Series.

3. Credit Score (10–20% impact)

What you can do:

• Pay bills on time
• Reduce credit card balances
• Dispute errors on credit reports
• Avoid opening too many new accounts

Impact: Improving credit from fair (650) to excellent (750+) can save $400–$1,000/year.

4. Coverage Levels and Deductibles (10–15% impact)

What you can do:

• Raise deductibles from $500 to $1,000 or $1,500
• Drop comprehensive/collision on vehicles worth <$3,000
• Adjust liability limits based on assets (don't over-insure or under-insure)
• Remove optional coverages you don't need

Impact: Raising deductibles saves 15–25%; dropping comp/collision saves 40–60%.

5. Annual Mileage (5–10% impact)

What you can do:

• Work from home or carpool to reduce mileage
• Accurately report low mileage to insurer
• Use public transit when possible

Impact: Low-mileage discounts save $150–$400/year.

6. Marital Status (5–10% impact)

What you can do:

• Notify insurer when you get married
• Consider bundling policies with spouse

Impact: Marriage discount saves 10–15% ($150–$300/year).

7. Prior Insurance History (5–10% impact)

What you can do:

• Maintain continuous coverage—even minimum liability—if you own a vehicle
• Never let your policy lapse, even for a day
• If you don't own a car, consider non-owner car insurance to maintain history

Impact: Continuous coverage saves 20–50% vs. drivers with lapses.

8. Education and Occupation (3–7% impact)

What you can do:

• Make sure your insurer has your correct occupation and education level
• Update when you complete a degree

Impact: Small but easy savings of $50–$200/year.

Combined impact: By optimizing controllable factors, you can reduce premiums by 30–60% ($600–$2,000/year for most drivers).

Factors You CANNOT Control

Some factors are fixed—but understanding them helps you plan.

1. Age (15–25% impact)

Why it matters: Statistical risk data shows younger and older drivers have higher accident rates.

What you can do:

• Wait it out—rates drop significantly at ages 19, 21, and 25
• Apply discounts available to your age group (good student for under 25)
• Maintain a spotless record to accelerate rate drops

2. Location/ZIP Code (15–20% impact)

Why it matters: Crime rates, traffic density, weather patterns, and state regulations vary widely.

What you can do:

• Shop around—insurers weight location differently
• If moving, research insurance costs in potential neighborhoods
• Consider bundling home + auto for discounts if you own a home

Note: Moving just to save on insurance rarely makes sense, but if you're already relocating, insurance costs are worth considering.

3. Gender (5–10% impact, where allowed)

Why it matters: Young male drivers statistically have more accidents than young females.

What you can do:

• Nothing directly—but males can offset higher rates with discounts (good student, telematics)
• Gender impact disappears around age 25–30

4. Claims History (overlaps with driving record)

Why it matters: Past claims predict future claims.

What you can do:

• Avoid filing small claims—pay out of pocket if damage is close to deductible
• Maintain clean record going forward—old claims drop off after 3–5 years

Bottom line: Focus your energy on factors you can control. You can't change your age, but you can drive safely, improve your credit, and choose the right vehicle to offset uncontrollable factors.

How Insurers Weigh Factors Differently

Not all insurance companies weigh factors the same way. This is why quotes vary 200–300% for the same driver.

Examples:

Progressive:

• Heavy emphasis on telematics (Snapshot program)
• Rewards safe driving behavior more than demographics
• Best for: Young drivers with safe habits

State Farm:

• Emphasizes loyalty and continuous coverage
• Strong multi-policy bundling discounts
• Best for: Long-term customers and families

Geico:

• Competitive for clean records and military affiliation
• Less forgiving of violations
• Best for: Drivers with spotless records

USAA (military only):

• Emphasizes service record and loyalty
• Lenient with young drivers in military families
• Best for: Active duty and veterans

Allstate:

• Strong weight on credit score and bundling
• Accident forgiveness programs
• Best for: Drivers with excellent credit

Why this matters: If you have a speeding ticket, one insurer might raise your rate 30% while another raises it only 10%. If you're a young driver, some insurers specialize in that market with better rates.

Takeaway: Always compare at least 5 insurers when shopping—different companies will treat your specific profile differently.

How Life Changes Affect Your Premium

Major life events trigger premium recalculations:

1. Moving to a new address

• Impact: Can increase or decrease premium by 30–100%
• Action: Notify insurer immediately—hidden address changes can void coverage

2. Getting married

• Impact: Typically 10–15% decrease
• Action: Update policy and consider bundling with spouse's policy

3. Adding a teenage driver

• Impact: +$2,000–$4,000/year
• Action: Apply all discounts (good student, defensive driving, telematics)

4. Buying a new car

• Impact: Varies by vehicle—sports car = major increase; safe sedan = moderate
• Action: Get insurance quote before finalizing purchase

5. Changing jobs

• Impact: 5–15% adjustment (up or down)
• Action: Update occupation with insurer

6. Retiring

• Impact: 5–15% decrease (lower mileage, less commuting)
• Action: Update mileage estimate with insurer

7. Getting a DUI or at-fault accident

• Impact: +40–200% (DUI highest)
• Action: Shop around—some insurers are more forgiving than others

8. Turning 25

• Impact: 10–30% decrease
• Action: Automatic at renewal—but verify insurer applied it

9. Credit score changes

• Impact: 10–40% (improvement or decline)
• Action: Some insurers check annually; ask for quote recalculation if your credit improved

10. Paying off car loan

• Impact: Can drop comp/collision if vehicle is older
• Action: Re-evaluate coverage needs

Pro tip: Notify your insurer of positive changes (marriage, better credit, safer vehicle) immediately. Negative changes (violations, accidents) will be discovered automatically at renewal.

State Variations in Rating Factors

Not all states allow insurers to use the same factors:

Credit score banned:

• California, Hawaii, Massachusetts, Michigan
• Impact: Drivers with poor credit pay less; drivers with excellent credit pay more

Gender-based pricing banned:

• California, Hawaii, Massachusetts, Montana, North Carolina, Pennsylvania
• Impact: Young male drivers pay less; young female drivers pay more

Age restrictions:

• California limits age as a rating factor
• Impact: Younger and older drivers may pay less

Prior insurance requirement:

• Some states require continuous coverage; lapses result in steep penalties
• Impact: Never let coverage lapse, even if not driving

No-fault states (MI, FL, NY, etc.):

• Higher base premiums due to PIP requirements
• Impact: All drivers pay more, regardless of individual factors

Check your state's Department of Insurance website for specific rules on what factors insurers can use.

Action Plan: Lower Your Premium in 30 Days

Follow these steps to reduce your premium quickly:

Week 1: Optimize current policy

• 1. Call your insurer and verify all discounts are applied (good student, defensive driving, bundling, etc.)
• 2. Increase deductibles if you can afford higher out-of-pocket costs
• 3. Drop comp/collision on vehicles worth <$3,000
• 4. Update mileage estimate if you drive less than reported

Week 2: Compare quotes

• 1. Get quotes from at least 5 insurers (Geico, State Farm, Progressive, Allstate, local agents)
• 2. Use identical coverage limits for accurate comparison
• 3. Ask each insurer about specific discounts you qualify for

Week 3: Improve your risk profile

• 1. Enroll in telematics program (Progressive Snapshot, Allstate Drivewise, etc.)
• 2. Complete a defensive driving course ($25–$100, saves 5–10%)
• 3. Check credit report for errors and dispute any inaccuracies

Week 4: Make strategic changes

• 1. Switch insurers if you found significantly better rates
• 2. Bundle home + auto if you own a home
• 3. Set calendar reminders to shop annually

Expected savings: $300–$1,500/year

For more strategies, see how car insurance premiums are calculated.

Frequently Asked Questions