How Car Insurance is Calculated Car insurance companies are entitled to take into account seven primary factors in determining how much your car insurance will cost: Your Choice of Coverage Cost of insurance will depend on what coverage you want. Liability only car insurance policies will cost less than if you add collision or comprehensive coverages. The deductible you choose will also vary the cost of your insurance. The Type of Car You Drive If you buy an expensive or fst car, expect to pay more to insure that car. When you are buying a car, be sure to consider your insurance costs along with the cost of your car. Your Location Urban drivers tend to pay more for their car insurance. Statistically, you car is more likely to be vandalized, stolen or in an accident if you are in a city rather than a rural area. How Much You Drive If you use your car for long distance driving by having long commutes or travelling, your insurance premiums will higher. The more miles you are on the road, the more likely you may be to be in a collision. On the other hand, if you can show you drive fewer than average miles, you may be able to save some money on premiums. Your Age, Sex, and Marital Status Insurance companies have gathered a huge amount of statistical data on people’s driving records and habits. Based on those statistics, single young male drivers have the highest accident rates. Therefore, single young male drivers pay some of the highest insurance rates. Your Driving Record Your driving record is a huge factor in your car insurance cost. If you are a 50 year old driving for 20 years with no accidents or moving violations, you will have a lower premium. But if you are a 50 year old in your first year of driving, your rates will be significantly higher. Your driving record not only covers how long you’ve been driving but whether you’ve had any moving violations or accidents. Those drivers without accidents or moving violations within the last five years will likely be quoted significantly lower rates. Credit History So much of the cost of insurance is based on statistics gathered by insurance companies. One of the statistics that correlates with a good driving history is you credit history. Insurance companies have found that when you pay your bills on time, you are less likely to be in an accident are a better risk than another drive with the same age and driving history but who has poor credit. Most insurance companies consider credit histories – but not all. Some insurance companies are willing to condier exceptional circumstances that would cause them to ignore or downgrade the effect of your credit history on your car insurance costs. Be sure to shop around if you find your insurance cost increase is mostly based on your credit history.