How do you calculate your car insurance premium?

I’m looking to buy a new car. I have some makes/models in mind, but I’m concerned about how much the insurance will cost. How are insurance premiums calculated?

Answer
Truthfully, there is no way to accurately calculate your car insurance premium on your own. Insurance companies charge various fees and consider myriad factors when pricing policies.
To complicate things further, each company weighs those factors differently. So, the best way to get a good estimate is to request insurance quotes.
Prices will vary from company to company, so shopping around will ensure you aren’t overpaying for coverage.
The Jerry app can help you quickly and easily price insurance premiums for each of the vehicles you’re considering. Signup takes roughly 45 seconds and you’ll get free quotes from up to 50 top providers in minutes.
Insurance companies consider the following when calculating your premium:
  1. Your driving record: If you have a clean driving record, your premium will be cheaper because you are considered lower risk.
  2. How much you use your car: The more miles you drive, the more likely you are to be in an accident, therefore increasing the risk you pose to insurance companies and increasing your premium.
  3. Where you live and park: Because certain areas have higher rates of vandalism, theft, and accidents, urban drivers pay a higher premium than those in small towns or rural areas.
  4. Your age: Generally, more experienced drivers have fewer accidents than those with less experience, which means teenagers and early-20-somethings pay more.
  5. Your gender: Statistically, women tend to get fewer DUIs and get into fewer—as well as less serious—accidents than men do. So, they tend to have lower premiums.
  6. The car you drive: This is a major factor in determining your premium. Different vehicles have different values and must be insured appropriately. A higher-value or luxury vehicle will cost more to insure than a moderately priced car.
  7. Your credit: Your credit score suggests how likely you are to file a claim and for how much. The lower your credit score, the higher your premium will be.
  8. The type and amount of coverage you need: The level of coverage you need will cause your premium to increase or decrease dramatically. Naturally, if you need more coverage, your premium will increase.
Hope this helps. And happy car shopping!
Chloe Jenkins
Answered on Oct 21, 2021
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