How to Estimate Your Car Insurance Premium

Published: May 19, 2015

Updated: May 15, 2018



Insurance companies determine your premium based on a number of different factors, so it’s often difficult for drivers to estimate how much they’ll be paying for their insurance policy; but if you know what factors companies use to rate, you can have a general idea of what it might cost.

However, the easiest and most accurate way to get an idea of what your premium will be is to do an instant quote. It only takes a few minutes, and you’ll have a much more accurate estimate of your rate.

If you want to know what factors insurance companies use to decide your rate and how much they might influence your premium, read on.


Where you live and keep your vehicle is an important factor in determining your premium. For example, if you live in an area where there’s less traffic, there are likely fewer accidents, and thus your premium would be lower because the insurance company is taking on less of a risk.

On the other hand, if you live in a busy city, there are likely more accidents, so your premium would be higher due to the increased risk to the company.

Finally, if there is a higher rate of theft or vandalism in your area (and you park outside, for example) your premium could reflect this higher risk of theft.


The age, make, model, safety rating, and cost of your vehicle also play a large factor in determining your rate. More expensive cars will cost more money to replace or repair; newer vehicles with better safety features might be cheaper due to a lower chance of occupants being injured; and faster cars will probably cost more because insurance companies assume you’re buying a fast car because you want to drive fast.

Furthermore, if you have a vehicle that’s a prime target for thieves, the company will rate for this, so be sure to do quotes for multiple different vehicles to find the right one for you.


How you use your car is also a determining factor for insurance rates. The more you drive your car, the more likely you could be involved in an accident, so shorter commutes make for lower premiums.

New technology allows insurance companies to send devices to customers that track exactly how much you’re using your vehicle. This technology, called “telematics,” is a great way for drivers to save money in this rating department.


Your driving record is another crucial determinant of your premium. Claims and convictions on your record are a sure way to drive your premium up, so keep a clean record.


The amount of coverage you have is the final factor in calculating your premium, as well as who you’re covering. Increasing liability limits and decreasing deductibles (what you have to pay in the event of a claim) will result in a higher premium.

Also, if you’re insuring more people (like your family) obviously your rate will increase; however, bundling your insurance policies (home and auto, as well as multiple autos) with the same company is also a good way to save money, as companies usually offer multi-vehicle and multi-line discounts.

Online Quotes

Whatever your insurance situation, nothing can beat the accuracy of an online quote for determining your rate. Be sure to use an instant quoting tool to find the cheapest rate for you!