Insurance premiums are affected by a wide array of variables. These premiums can also different drastically from one company to another as well, based upon the different criteria that they rank as important in determing their pricing structure.
The first thing that you have to consider when you are getting insurance is the area that you live in. If you live in a high crime neighborhood and the insurance company has heard of a lot of car thefts in that area, then they are more likely to raise premiums for people that live in that area. This is also true for areas that have a lot of snow, such as Alaska. Areas that are prone to natural disasters are also reasons why an area may have higher rates. There are numerous reasons why a specific area might have higher costs than other areas.
The next thing that you have to consider is the value and type of vehicle that you are driving. Obviously a cheap car from the 70’s is probably going to cost substantially less than a brand new 2007 Mercedes. This is mostly based upon the likelihood that someone would steal it, how much it would cost to replace it, and how well it performs in accidents and the average amount it costs to repair that particular type of vehicle.
You also have to consider your age and driving record. The age groups that are rated as having the highest accident rates are teenagers and the elderly. As such, these groups generally have somewhat higher insurance rates. As you get more tickets, your insurance will go up, and eventually you could be required special insurance, for example if you have ever received a DUI or wreckless endangerment, or if you get into frequent accidents that are your fault.
There are a few times that your insurance does go down. If you get good grades in school you can get a good grade discount, if you are military you can get a discount, if you have premium protection on your vehicle such as lojack or an alarm, then you will also get a discount. Some companies even offer discounts if you haven’t had an accident, went a while with a great driving record, or once you hit a certain age, specifically 25.