The factors that affect your car insurance rates include where you live, how much you drive, your age, and more. Understanding these factors can help you make informed decisions and choose coverage that aligns with your needs and budget.
Read on to see why your driving record may not be the only deciding factor on your insurance rates. We’ll also discuss in detail 6 factors that may affect how much you pay for car insurance.
Looking to optimize or change your car insurance coverage? Infinity Insurance Agency, Inc. (IIA) can help. IIA works with over 20 insurance carriers so that you can compare options and choose the one that fits your budget.
Common misconception: Rates are based on your driving record
Many drivers may think their driving record is the main factor dictating the price of their premiums, but it goes beyond that. Some drivers have a clean driving record but may still see higher insurance premiums than average due to other factors. They may have a luxury vehicle, for example, or live in a congested area.
Your driving history can affect your insurance rates. However, insurance companies consider other factors as well. Let’s dive into them so you can get a better picture of what influences how much your premiums are.
6 factors that affect your auto insurance rates
1. Your location
The state, city, and even zip code where you live can have a great impact on your auto insurance rates. For one thing, each state has its own insurance requirements. Most states require liability coverage, while some also require personal injury protection and uninsured/underinsured motorist coverage, according to the Insurance Information Institute.
Drivers in cities typically pay higher premiums than those in rural areas, since cities have more congested traffic. Additionally, the risk of car theft and vandalism is higher in urban areas, making policies that include comprehensive coverage (which may help repair or replace your vehicle after vandalism or theft) more expensive.
2. Your age and driving experience
Younger drivers usually pay more for car insurance than older, more experienced drivers. For instance, teens 18 and under pay a monthly average rate of $247 to $272, while drivers 25 to 39 pay a monthly average of $156 to $169, according to Yahoo! Finance.
Your driving record can also affect your premiums. Drivers without infractions in their record may see lower car insurance rates, while those with less-than-perfect driving histories may pay more, as insurers consider them higher risk. If you have a clean record, ask your insurance agent if you qualify for a discount.
If you have a less-than-perfect driving record and are looking for affordable car insurance, contact IIA. We work with over 20 insurance companies offering budget-friendly car insurance options.
3. The type of car you drive
Due to their higher cost of repair or replacement, luxury and sports vehicles tend to cost more to insure. Some of these vehicles may be a common theft target as well. In Chicago, for instance, high-end vehicles are often targeted, according to Chicago Police Commander Andrew Costello (as of 2025).
You may see higher premiums if you’ve customized your vehicle with additional parts such as custom rims, engine upgrades, body kits, etc. These additions often make the vehicle more expensive to repair.
4. Your credit-based insurance score
Most states, including Florida and Georgia, allow insurers to use a credit-based insurance score to help determine insurance rates for drivers. However, it’s not the only determining factor, according to the National Association of Insurance Commissioners (NAIC).
Your credit-based insurance score isn’t the same as your credit score. It includes factors such as your payment history, any outstanding debt, how long you’ve had a credit history, etc. Better scores may lead to lower car insurance premiums.
5. Your annual mileage
Insurance companies also take into account how much you drive. The longer you are behind the wheel, the greater the risk of an accident you face, so you may see an increase in insurance rates. For example, someone who commutes 30 miles daily in Phoenix, AZ, may pay more for car insurance than someone who works from home and only drives occasionally.
6. The coverages and deductibles you choose
Besides the minimum insurance requirements, you may opt for optional coverages that may help cover losses in a variety of situations. For example, comprehensive coverage can help pay for repairs to your vehicle after a flood. Roadside assistance coverage, on the other hand, can help if you experience a blown tire while driving.
While having more coverage on your car insurance policy may increase your premiums, your policy can also help pay more after a covered loss.
The deductible you choose also affects your premiums. Generally, choosing a higher deductible reduces your car insurance premiums. Your policy helps pay for a covered loss after you’ve paid your deductible. Therefore, it’s recommended that you pick a deductible you can afford in case a covered accident or event happens.
Compare car insurance rates
Not all insurance companies weigh the above factors the same way. IIA works with multiple carriers, so that you can compare quotes and find a competitive car insurance rate. An IIA agent can help you compare plans, choose coverages depending on your needs and budget, and understand various payment options.
Get a quote for budget-friendly car insurance online or talk to a licensed agent who can help you go over the factors affecting your car insurance rates by calling 1-855-478-3705.