Car insurance premiums are calculated using a range of factors intended to estimate the likelihood and potential cost of a claim. The exact formula varies among insurers and jurisdictions.
## Driver and vehicle information
Insurers may consider driving history, years of driving experience, claims history, vehicle type, repair costs, safety equipment, and the way a vehicle is used. A vehicle that is expensive to repair or frequently targeted for theft may cost more to insure.
## Location and mileage
Where a car is parked and driven can influence exposure to traffic collisions, theft, weather damage, and vandalism. Annual mileage can also matter because more time on the road may mean greater exposure to accidents. Be accurate when estimating mileage and tell the insurer if your driving habits change.
## Coverage choices
Higher liability limits, lower deductibles, and additional benefits usually affect the premium. A deductible is the amount you pay toward certain covered losses before the insurer pays the remainder, subject to policy terms.
## Ways to seek savings
Ask about eligible discounts for bundling policies, safe driving, vehicle safety features, low mileage, or paying in full. Availability differs by company. Compare several quotes with identical coverage and review your policy at renewal.
Never omit or misstate information to obtain a lower price. Incorrect information can create coverage disputes or other consequences. A licensed local insurance professional can explain which factors are legally permitted and relevant in your area.