Why is my insurance so expensive?

Have you ever wondered what determines the cost of your auto insurance policy? There are several factors that affect your premium and it does vary by company.

First off, your driving record. The better your record, the lower your premium. If you have had accidents or serious traffic violations, you will probably pay more.

How much you use your car is also a factor. The more miles you drive, your chance of an accident increases, and so you are more of a risk, thus a higher premium is paid for coverage.

Next, your age is a factor. Since more mature drivers have fewer accidents, individuals under 25 years of age usually pay more.

What about your gender? It is a factor too. As a group, women tend to be in fewer accidents, less serious accidents and have fewer DUIs than male drivers. So, all other things being equal, women usually pay less than men.

Also, what you drive matters. If you drive a vehicle that has a poor safety rating, you will pay more. The cost of the car itself and potential repair expenses are also factors. Insurers not only look at how safe your car is to drive, but what potential damage it can inflict on another car.

And finally, your credit. Many insurers use credit-based insurance scoring. Things considered are payment history, bankruptcies, collections and outstanding debt. The better your credit, the lower your rates will be.