By Evan Kowalski · Editor
Published · Updated
Answer in brief
A car insurance premium is the product of roughly a dozen factors. The ones that move it most are your driving record, your age and years licensed, your ZIP code, the vehicle, your coverage choices and—in most states—a credit-based insurance score. Layered on top are market-wide increases that have nothing to do with you: repair costs, injury claim severity, weather losses and vehicle theft have all risen sharply since 2021. If your premium feels high, the cause is usually two or three of these stacking, and the first step is to find out which.
Factors ranked by typical impact
| Factor | Typical swing | Can you change it? |
|---|---|---|
| Driving record (DUI, at-fault accident, tickets) | +20% to +100%+ | Over 3–5 years |
| Age / years licensed | Teens pay 2–3x adult rates | Only with time |
| ZIP code / territory | ±50% between areas of one state | By moving |
| Vehicle | ±40% between models | Yes |
| Coverage limits and deductibles | ±40% | Yes |
| Credit-based insurance score | ±30–60% where allowed | Over time |
| Coverage lapse / no prior insurance | +10% to +30% | After 6–12 months |
| Annual mileage | ±10–15% | Yes |
| Insurer's own rate level | ±30% for the same driver | Yes—compare |
| Market-wide trend increases | +10% to +25% per year recently | No |
| Discounts not applied | 5–25% | Yes |
| Household drivers added | Large for teens | Partly |
How the factors combine
Insurers start from a base rate for each coverage in your territory, then multiply by factors for driver, vehicle and record, then apply discounts. Because the factors multiply rather than add, two or three unfavourable ones compound: a young driver, in an urban ZIP code, with a recent ticket, can pay four or five times what a middle-aged driver in a suburb with a clean record pays for the same car.
The part that isn't about you
Since 2021 the cost of settling claims has risen faster than general inflation—used-car values, parts, labour, medical costs and litigation have all climbed—and insurers have filed repeated base-rate increases to catch up. That is why premiums rose for drivers who changed nothing. The why rates went up with no claims guide explains this in detail.
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Finding your reasons
Read your declarations page and renewal notice for surcharges, tier changes and lost discounts. Then work through the factor guides on this site—credit, age, location, vehicle, record, lapse—to see which apply. The how to lower guide takes it from there.
Entries in this guide
Specific questions answered in more depth.
Questions & answers
What is the single biggest factor in car insurance rates?
For most adults, driving record and location. For drivers under 25, age dominates everything else.
Why does my friend pay less for the same car?
Different ZIP code, age, record, credit score, coverage, mileage or insurer—any one can account for a large gap.
Can I ask my insurer why my rate is what it is?
Yes. Insurers can tell you which surcharges, tiers and discounts apply to your policy, and in many states must explain adverse actions based on credit.
Terms used in this guide
- Rating factor
- Any characteristic used to set a premium: record, age, years licensed, territory, vehicle, credit-based score, mileage, coverage.
- Base rate
- The starting premium for a coverage in a territory before individual factors and discounts.
- Rating tier
- A grouping (preferred, standard, non-standard) with its own base rates. Record, credit and history determine your tier.
- Surcharge
- A percentage added to the premium for an at-fault accident or violation, typically for three years.
Sources and references
Legal figures on this page (minimum limits, filing periods, statutory benefits) are checked against the primary law or the state insurance regulator listed below. Links and figures last verified Nov 2026.
- Insurance Research Council — Insurance Research CouncilIndependent researchIndependent, industry-funded research on uninsured motorists, claim trends and litigation.
- Trends and Insights: Auto insurance rates (June 2024) — Insurance Information Institute (2024)Independent researchWhy premiums rose 2021–2024: crash frequency and severity, repair and labour inflation, vehicle technology, attorney involvement.
- Facts + Statistics: Auto insurance — Insurance Information Institute (2025)Statistical dataNAIC countrywide average auto expenditure: $1,127 (2022), $1,282 (2023); most expensive states in 2023 were Florida, Louisiana and New York.
- 2019–2023 Auto Insurance Database: average premium supplement — National Association of Insurance Commissioners (2025)Statistical dataCountrywide average expenditure $1,281 in 2023 (+13.98%); combined average premium $1,438; state tables for liability, collision and comprehensive.
- What determines the price of an auto insurance policy? — Insurance Information InstituteConsumer guidanceRating factors: driving record, mileage, location, age, gender, vehicle, credit-based insurance score, coverage choices. Notes ZIP-code rating is prohibited in California and Michigan and gender rating is prohibited in seven states.
- How much auto coverage do I need? — Insurance Information InstituteConsumer guidanceWhy state minimums are a floor; choosing liability limits that protect assets; when collision and comprehensive are worth keeping.
Practical guidance on this page is original editorial work. Cited sources support factual statements and do not endorse this site. Dollar ranges described as typical or illustrative are editorial estimates, not figures from these sources.
Guide
Why Car Insurance Went Up With No Claims or Tickets
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