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What Factors Do Insurance Companies Use To Determine Your Car Insurance Rates?


How do most insurance companies determine your car insurance premiums?  Many factors can affect your premium. Not all companies use all of these factors, and some might use factors not listed here. here are some of the more common facts.  Can you think of any others?

1. Your driving record.

The better your record, the lower your premium. If you have had accidents or serious traffic violations, it is likely you will pay more than if you have a clean driving record. You may also pay more if you are a new driver and have not been insured for a number of years.

2. How much you use your car.

The more miles you drive, the more chance for accidents. If you drive your car for work, or drive it a long distance to work, you will pay more. If you drive only occasionally—what some companies call “pleasure use”, you will pay less.

3. Where your car is parked and where you live.

Where you live and where the car is parked can affect the cost of your insurance. Generally, due to higher rates of vandalism, theft and accidents, urban drivers pay a higher auto insurance price than those in small towns or rural areas.  Other factors that vary from one area or state to another are: cost and frequency of litigation; medical care and car repair costs; prevalence of auto insurance fraud; and weather trends.

4. Age.

In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car.

5. Gender.

As a group, women tend to get into fewer accidents, have fewer driver-under-the-influence accidents (DUIs) and most importantly less serious accidents than men. So, all other things being equal, women generally pay less for auto insurance than men. Of course, over time individual driving history for both men and women will have a greater impact on what they pay for auto insurance.

6. The type of car you drive.

Some cars cost more to insure than others. Variables include the likelihood of theft, the cost of the car itself is major rate factor, the cost of repairs, and the overall safety record of the car. Engine sizes, even among the same makes and models, can also impact insurance premiums. Cars with high quality safety equipment might qualify for premium discounts.

7. Credit.

For many insurers, credit-based insurance scoring is one of the most important and statistically valid tools to predict the likelihood of a person filing a claim and the likely cost of that claim. Credit-based insurance scores are based on information like payment history, bankruptcies, collections, outstanding debt and length of credit history. For example, regular, on-time credit card and mortgage payments affect a score positively, while late payments affect a score negatively.

8. The type and amount of coverage.

In virtually every state, by law you must buy a minimum amount of liability insurance. The state required limits are generally very low and most people should consider purchasing much more than the state requirement—the recommended amount of liability protection is about ten times the average state minimum. If you have a new or recent model of car, you likely will also buy comprehensive and collision coverage, which pays for damage to your car due to weather, theft or physical damage to the car such as being hit by a tree. Comprehensive and collision coverages are subject to deductibles; the higher the deductible, the lower your auto insurance premium. While there is no legal requirement to purchase these coverages, if you finance the purchase of the car or you lease it you may be required by contract.

9.  Limited tort or full tort.

In Pennsylvania, all applicants for an auto insurance policy must select either limited tort or full tort.  The limited tort option is cheaper, but not by much, and you give up certain rights to sue if you select it.  Full tort is recommended.  If you want a full and more detailed explanation of this important option contact a Pennsylvania car accident lawyer at Schmidt Kramer.


If you, a family member, or a close friend has been seriously injured in a Pennsylvania wrong-way car crash, it’s time to think of fundamental questions of justice. Should you bear the financial burden of paying absurdly large medical bills for someone else’s negligence? Should the injured party accept that his injuries may mean he will never be able to work again, or will he face decades of painful disability? If the accident caused a death, can you just forget about it? Absolutely not.

By filing a personal injury claim against the driver who caused this horrible accident, you can publicly hold him accountable for his actions. You can also recover the fair compensation you deserve for your medical bills, lost income, and suffering. Call the Harrisburg car crash lawyers of Schmidt Kramer at 717-888-8888 or 888-476-0807 as soon as possible after your auto accident in Dauphin County, Lancaster County, Cumberland County, or neighboring areas.

At your request, we will send you a FREE copy of our client book, Who Pays The Bills When You Are Injured In An Automobile Accident? When you are ready to hire legal representation, remember that we offer FREE consultations for potential clients who want to learn what recovery we can secure for them.