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Many Factors Affect Your Auto Insurance Premium

Published: June 2011

It's ironic that buying auto insurance is almost completely unlike purchasing the car you're insuring. While it's easy to see the car's sticker price, your auto insurance premium is set by dozens of factors, ranging from your age to where you live and areas in which you do most of your driving.

When considering this auto insurance information, it's important to keep in mind that these are rules of thumb, and that your premium is set by each insurance company's unique practices. To learn more about why your premium could change, check out our interactive guide: My Premium Changed—Why?

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What Factors Into Your Auto Insurance Premium?

The Car You Drive & Auto Insurance Cost
A general rule of thumb is that a more expensive car costs more to insure—all other things being equal—than a car that costs significantly less. Of course, the deductible amounts you choose significantly affect your auto insurance premium, with lower deductibles typically translating into higher premium payments.

Your Driving Record Predicts Auto Insurance Cost
If you've been in multiple accidents, especially if you were at fault, your cost for auto insurance is likely to be higher than someone with several years of accident-free driving.

Your Auto Insurance Premium Factors in Where & How Much You Drive
Your neighborhood and where you park your car overnight affects your auto insurance premium. Urban neighborhoods typically have higher rates of accidents, theft, and vandalism than more rural areas, resulting in premiums that are likely to be higher.

Likewise, someone commuting 50 miles a day may pay a higher auto insurance premium than someone whose commute is only 10 miles, since more miles behind the wheel means more exposure to risk.

Demographics are Part of Your Auto Insurance Premium
Your age, sex, and whether or not you're married are all factored in as part of your premium. But a key point here is that drivers under 25—especially unmarried males—typically cost more to insure. In fact, adding a teenage driver to your auto insurance policy may greatly affect your auto insurance premium.

Many companies also consider your credit rating and history when setting your auto insurance premium.

Strategies for Saving on Your Auto Insurance Premium

Shop for Auto Insurance Discounts
At Allstate, we offer more than a dozen auto insurance discounts, including multiple policy, safe driver, safe car, student, and senior discounts. Keep in mind, though, that not all discounts are available in every state—get a no-obligation auto insurance quote to see all the discounts you could qualify for.

*This information was obtained by the Pennsylvania Auto Theft Prevention Authority at

The availability, qualifications and amounts of these discounts may vary from state to state. In addition, terms, conditions and exclusions not described above may apply, and total savings may vary depending on the coverages purchased. In some states, we may offer discounts that are not listed here. For more information regarding your eligibility for these savings opportunities, please contact your Allstate agent.

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