There are many factors that have an impact on your auto insurance premium. The underwriting departments from each insurance company (the people who have a look at your records and decide how much to charge you) say that they take hundreds of factors into account. However, here is a breakdown on the most important ones.

Age

Statistics show that people under 25 are extremely risky drivers and, among these, the ones below 19 are total disasters on the road. The safest drivers are said to be those between 45 and 55.

Gender

Leaving sexist jokes aside, women are, statistically, better drivers than men. They tend to get into fewer accidents because they drive more carefully, drive fewer miles per year than men and are less likely to get behind the wheel after they have consumed alcohol. There are some states — and Massachusetts is a good example — where the Department of Motor Vehicles has asked insurance companies not to factor in the gender when computing a customer’s rate.

Marital status

Married people are consider safer drivers than single ones, hence a married driver will pay less than a single one with an identical driving record.

Geographical area

People who live in the countryside and, in general, areas with little traffic will pay less than those who live in crowded metropolitan regions because the risk of an accident is substantially lower if there is very traffic on the roads where you usually drive. Some areas have higher criminality rates, hence the likelihood of your car being stolen is also higher. There have been reports of people noticing a significant change in their premium just by moving across the street.

Driving record

The more traffic violations you have, the more you will be charged. The level of the surcharge depends on how serious your violation was — a speeding ticket, for instance, will not count as much as a DUI conviction. If you keep a spotless record, you will be entitled to the so-called No-Claims Discount (NCD) that can go up to as much as 60% of the value of the policy.

Vehicle type

A cheap car will cost less to insure than a fancy SUV sitting on 24” rims. The reasons are quite obvious — an expensive car costs more to repair, the spare parts are more expensive and the associated labor costs are much higher. Similarly, sports cars cost more to insure than other vehicles in the same price range, because they tend to get involved a lot more often in accidents.

Credit score

Back in the days when the credit score system was introduced, it was only a tool used by banks and other financial institution to assess your creditworthiness and your abilities to pay back a loan. Nowadays everybody checks your credit rating, including landlords, phone carriers and insurance companies. People with bad credit are more likely, from a statistical point of view, to file claims and even to attempt to commit insurance fraud. Also, if you are unable to pay your bills on time, every time, you will probably miss insurance payments as well.

Occupation

White collars are charged less than blue collars. A pizza delivery man, for instance, is more likely to be involved in an accident than a financial advisor who sits behind his desk 12 hours a day.

Driving distance to work

It’s obvious that if you drive long miles to work, and eventually cross major interstates, you are far more likely to be involved in an accident than someone who lives just across the workplace.

Miles driven each year

The more you drive, the more likely you are to be involved in a car accident. If you drive less than 5,000 miles a year you may be eligible for really consistent discounts.