The insurance premium is the amount you pay to your insurance company on your car in exchange for insurance coverage in a specific coverage period. Typically, insurance premiums are paid monthly, bi-annually, or in yearly increments. Your insurance company will pay for coverage details in the insurance policy like collision and liability coverage when you will pay your entire premium. Your premium is based on your personal information, your card information, and coverage selection.

Car Insurance Costs

Auto insurance is different for every individual, depending on the state in which he lives, insurance company choice, and coverage type. Car insurance rates are increasing at a very high pace due to the increase in car purchases. Car insurance costs are also affected by the driver’s history, state regulations, and state accident rates.

High car insurance rates are for full coverage insurance, including collision, liability, uninsured motorist safety, comprehensive, and much other state-mandated coverage. You have to know how much car insurance for you is; then you can put some or maybe all the factors that work for you.

Factors that Determine Cost Insurance Rates

If you wonder why your car insurance rates are higher than others, you must look into the numerous factors that determine car insurance rates. Every insurance company has its secret and updates its insurance formula regularly for calculating your premium. Your insurance company looks into the following factors while setting up your premium costs. Therefore your premium rates depend on:

  • Type of car: The value and type of your car determine the car’s insurance cost. Your premium cost will be higher if your car model has high theft and crash rates.
  • Driving record: Your traffic history is one of the major factors of high auto insurance cost, especially if your history is associated with traffic violations, past accidents, or speeding tickets. 
  • Location: Auto insurance premiums are badly affected by the theft and crash rates; therefore, the driver’s state matters a lot as every state has different rules and regulations regarding insurance. 
  • Age: Insurance Company demands more from young drivers. Individuals of age 16 to 25 pay the highest insurance premium costs. The premium costs decrease slightly for the individuals aged 26-54 and again increase for those above 55.  
  • Gender: Some states demand higher premium costs from men as compared to women. At the same time, some are totally against gender biases. 
  • Driving habits: Premium rates are affected by your driving habits. The more you drive, the more you will have to pay the auto premium cost. 
  • Credit history: Better insurance rates are also associated with better credit history; therefore, maintain your credit history to save on your insurance. 
  • Coverage level: The coverage type you choose to have a huge impact on the auto insurance premium cost; therefore, you must choose comprehensive or collision coverage.

How to Lower the High Car Insurance Premium Rates

Your auto insurance protects you financially and gives you peace of mind. Car insurances are rising at a great speed, due to which insurance premiums are going up and becoming expensive day by day. But suppose your insurance rates are growing up still after driving a modest vehicle, driving at a limited speed, being safe on the road, always obeying the traffic rules, and following safe distances. In that case, you must follow the below given basic steps to save money on your high car insurance premium rates.

  1. High Car

Every individual wishes to have a branded and new car model, but auto insurance becomes a hurdle in the way of a dream. Few cars cost more insurance premium rates, but you may get discounts on your high car insurance premium rates if you drive a built-in security features vehicle.

  • Multi-Insurance in A Single Place

When you correctly bundle your single or multiple auto and home insurance, then you can save time and money. Insurance companies give a good discount for bundling your policies together. Bundling up your insurances in a single insurance company is also convenient in managing your insurance policies. It also results in paying you a single deductible that will help file multiple claims in one place.  

  • Drive Safely

Auto insurance companies offer safe driver discounts and packages. The premium cost can be reduced if you are securely driving your car. Rash driving, laws violations, and ignoring stop signs result in higher premium rates; therefore, drive safely to avoid high premium rates. Premium rates vary from company to company, but every company gives huge discounts when you move without violation for a long period, resulting in your savings.

  • Your Deductibles and Limits

Your deductible is the amount you agree to pay before your insurance that helps you cover the loss. It has a huge impact on the car insurance premium costs as setting a higher deductible means less pay for the policy.

On the other hand, limit is the amount paid by the insurance company written in the policy to cover your loss. The limit can be adjusted based on your needs as coverage in the policy has its limit. It shows that higher the coverage more will be the premium rates.

  • Credit Ratings

Insurance premium rates are also affected by the credit score. A good credit score symbolizes dependability and helps in decreasing the chances of filing false insurance claims. Your monthly, bi-annually, or yearly payments must be paid on time to keep your credit score good. You must also check your credit card history regularly to ensure everything is going well.


New and expensive cars are the dreams of everyone, but due to the increase of premium rates and insurance rates of cars, you face a lot of issues while fulfilling your dream. So, keeping the factors that determine the auto insurance premium cost in mind, you must follow the techniques of lowering the car insurance premium cost properly to avoid future hassle and issues. Thanks for reading our article! Please subscribe to our newsletter for free. Stay tuned on Side.Cr for the latest automotive news & reviews.

Author: Brandon Park