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March 25, 2024

Factors Influencing Auto Insurance Premiums

Insurers calculate auto insurance premiums by considering several factors, each contributing to the overall cost of your policy. Understanding how auto premiums work can help you make more informed decisions about your auto insurance and find ways to reduce your premiums.

Driving Record

Your driving history can indicate how risky you are to insure. Incidents such as accidents, speeding tickets and DUIs can increase your premiums because of the higher likelihood of causing a claim.

Age Man Inside Vehicle

Younger drivers, especially those under 25, often face higher premiums and higher accident rates due to their lack of driving experience. Conversely, older drivers may see their rates increase again as they reach ages where reflexes and vision may begin to decline.

Vehicle Type

Your vehicle’s make, model and age can also impact your insurance costs. Newer cars are typically more costly to repair or replace, leading to higher premiums. Vehicles with high-performance capabilities or poor safety records may be considered higher risk.


Where you live and park your car can affect your insurance rates. Urban areas, with higher rates of accidents and theft, may result in higher premiums than rural areas. Even within a city, different neighborhoods can have varying risk levels that affect costs.

Credit History

In many states, your credit score can be used as one factor in determining your insurance premiums. A higher credit score may show insurers that you are generally more responsible and less likely to file claims, potentially lowering your rates.

Coverage Type and Deductibles

Your coverage choices, such as comprehensive or collision coverage, and your deductible amounts can significantly influence your premiums. Higher deductibles may lower your premium cost, but you may pay more out-of-pocket expenses in the event of a claim.

Discounts and Bundling

Insurers often offer discounts for various reasons, such as a history of safe driving, multiple policies with the same company and anti-theft devices. Exploring these options can lead to savings on your premiums.

Contact Us

For personalized advice and to explore options that could lower your auto insurance premiums, contact Interstate Insurance Agency, Inc in Newton, IA. Our team can help you navigate the complexities of auto insurance and find a policy that suits your needs and budget.


This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.

Categories: Auto Insurance

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