How is auto insurance calculated in the US?

Auto insurance looks at many different factors, which can be broken down into 6 generic categories: Vehicle, driving record, coverage applied for, credit score, location, and applicable discounts. The same data is used in online quotes, or quotes acquired over the phone or in person.

Vehicle calculations are based on the model and make of your car, any safety features that have been installed, and that vehicle's highway safety statistics based on tests and actual information turned in by various highway patrols. To keep your insurance premiums down, avoid sports cars and look for vehicles that include all-passenger airbags.

Driving history is account of any infractions you have been found guilty of. It does not include cases where adjudication was withheld or any offenses outside of your driving record. This information is used to decide how safe of a driver you are, and what your potential risk level may be.

Coverages differ, and the cost of coverage is affected by what you choose. In some cases, your driving record may make you ineligible for certain coverages, or you may be required to carry others, such as an SR-22 certificate of financial responsibility. You can adjust your coverages and deductions to provide yourself with more affordable options.

Credit score is a measure of your financial responsibility. Just as your credit score is checked when you apply for a loan, it is checked again when you apply for auto insurance, and for the same reasons. Your credit score reflects how much risk you pose to companies who choose to invest in you. A higher credit score means that you are prompt in dealing with obligations, while a lower score means that you may encounter problems from time to time. This has a large affect on what your insurance premiums will be.

Location is a key for many reasons. The state you live will have it's own laws and regulations fro insurance companies to follow, for instance. Additionally, the zip code you live in may be more or less dangerous, and translates into a changing risk for the insurance company. Even where your car is parked at night could play a factor, as vehicles which are parked inside a private garage are not subject to the dangers of vandalism and burglary which might be common when parked on the street.

Discounts could be any of more than a dozen discounts offered by the insurance company. This might include safe driver discounts, good student discounts, discounts based on your education level or the type of job you hold, or even discounts related to how far you drive the car each year.