When shopping for car insurance, it’s crucial to understand how insurers calculate rates. A number of factors contribute to determining costs – age, location, driving history and claims history play a part. Some are within your control while others, like type of vehicle you drive or your place of residence may not. By understanding how car insurers determine rates you can take steps to reduce them and save money.

All companies calculate their rates differently, but most start with a base rate that all drivers must pay before adding additional elements that increase or decrease it. Generally speaking, more risky drivers tend to incur higher rates; younger drivers with limited driving experience and who pose greater risks tend to see this trend more clearly than drivers with established driving records and credit histories will get reduced rates.

Make, model and year of the car you own also play an integral part in calculating your rates. Newer, safer models typically have lower premiums than older ones with limited safety features. Furthermore, being involved in an accident or stolen could increase your rates; but having an unblemished record might have no lasting repercussions at all.

Your coverage limits have an effect on your rates; for instance, opting for only state minimum liability will likely result in higher rates than opting for comprehensive and collision policies, since taking on more risk will require taking on more coverages. Your deductible also has an effect; companies utilize it to mitigate some of their own risk; therefore you should feel comfortable selecting an amount you can easily cover should an accident or claim arise.

Another key element that can determine your car rates is how it is being used. For instance, if your commute involves long distances each day and parking in a secure garage, your rates will likely be much lower than someone who uses their car solely for local runs and only drives on weekends – as driving on weekends increases the risk of an accident considerably.

No one knows your exact insurance rate until they shop around for quotes, but you can lower it by reducing coverage amounts, adjusting deductible amounts, and taking advantage of any discounts for which you qualify. It is therefore critical that you compare multiple companies before making your final purchase decision in order to make an accurate comparison; when doing this, make sure that each quote provides similar types and limits with additional endorsements included as appropriate.