The following things contribute towards the cost of your insurance:
Territory
Different territories and rated differently for insurance purposes. Densely populated areas (usually cities) generally cost more than city outskirts. The major determining factor here is usually the historical loss record for your rated territory. Historical losses are used to predict future or expected losses. Expected losses are a major factor in determining your premium because insurance companies have to collect enough premum to cover losses. Note that a fundamental principle in insurance, is that the losses of a few are covered by many. The implication here is that every policy holder pays little premium to cover for the losses of a few policy holders.
Type for vehicle
A general rule is that the cost of insurance is likely to increase in proportion with the cost of repairs (or replacement) of the insured vehicle. Therefore, expensive vehicle would likely cost more to insure. This, however, not always the case.
As mentioned earlier, the projected cost of losses has a direct influence on the premium charged by insurers to cover those losses. For certain insurance coverages, vehicle value as a variable, does not necessarily increase with claims cost. One such coverage is for Bodily Injury. Some expensive vehicles may be safer and therefore have lower overall costs or claims for bodily injury. This MAY be reflected in the bodily injury premiums for those vehicles.
Drivers
The drivers rated on a policy are used heavily to determine the likelyhood of losses or claims. The driving record of the individual drivers is therefore a major factor in deter mining premiums. Factors considered are the age of the drivers (younger drivers usually cost more), the sex of the driver (in some states), the number of driver convictions and the number of accidents. The underlying principle here that each driver attribute is used to predict the likely of future losses. Historical data of a large sample of data is used to make these calculations.
Usage
Do you commute to work? How far do you commute? Is you car used for business? How many miles do you drive annually?Insurance companies may have ranges/classes based on the type and amount of usage. A commute to work will likely increase your premium. Using your vehicle for business may also have an impact on your premium.
Coverage
The type and amount of coverage you have on your policy will affect what you ultimately pay. Ask what coverages you can delete, reduce or modify and the implications. Use this information to determine what coverages suit you best. Most companies/states/provinces have standard coverages which can be modified to save premium. You may be able to reduce limits or certain coverages. Make sure you are completely aware of the implications of your modifications.