How Auto Insurance Premiums Are Calculated?

  1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    This calculation is based upon state law.  In California the rate is based upon where the car is located, how many miles it drives each year, the use of the vehicle, the year, make and model of the vehicle and the driving record of the members of the household.
    Answered on February 19, 2014
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  2. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    Insurance Companies file their rates and underwriting standards with each state's Insurance Department. The various rates are a result of loss report studies and trends, vehicle values and repair costs, driver data etc. The actual premium that you pay is determined by a measuring of the various rates and factors as they apply to your situation. Thus your age, location, driving experience and history along with credit are factors. So too is the year make and model of your car, the number of cars you are insuring, how those cars are used and what your claims history may be. Finally any discounts for which you qualify are applied and the result is the premium.
    Answered on November 10, 2015
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