Auto insurance is a recurring expense for almost all car owners. In most states, you cannot legally drive a car without auto liability insurance. In some states, you cannot even register a vehicle without providing proof of liability insurance. Auto insurance premium rates vary widely. Insurance companies take a number of factors into account when setting auto insurance rates. This can result in substantial rate variation between competing companies for what seems to be equivalent coverage. What factors do auto insurance companies consider when setting premium rates? 1. Driving record. Drivers who have recent traffic tickets or accidents on their driving record can expect to pay more for their auto insurance. Drivers with a DUI conviction on their record may find themselves limited to a high risk policy at a substantially higher premium. 2. Age. Drivers under age 25 and over age 70 have more accidents than other drivers. Most insurance companies increase premium rates for drivers who fall in the these high risk age groups. 3. Gender. Women, on average, have fewer auto accidents than men. For that reason, a female driver with the same driving record as a male driver will usually pay a lower auto insurance premium than the male driver. 4. Credit record. Most car insurance companies review your credit when determining your car insurance premium. Customers with bad credit can expect to pay as much as 50 percent more for their car insurance than customers with good credit. Insurers justify their reliance on credit reports by arguing that customers with poor credit tend to file more claims than customers with good credit. Additionally, insurers may also believe that a person’s poor credit rating may indicate a certain degree of recklessness which makes the person a greater risk for the insurance company. 5. Vehicle insured. Some vehicles cost more to insure than others. If a particular make of automobile has a high theft rate, a poor safety record, or is overly expensive to repair, then the insurance premium rates for that vehicle will also tend to be higher. Additionally, premiums may also be higher for vehicles that tend to cause more damage when involved in accidents. 6. Vehicle usage. Generally, the more you drive your vehicle, the higher your auto insurance premium will be. Simply put, the more that you drive, the greater the possibility that you may be involved in an accident Category:Home › Other • Pomegranates: A newly discovered superfood • Where did the joke why did the chicken cross the road come from and why is it funny? • Can mothers diagnosed with bipolar disorder make good parents? • Spiritual evolution of human consciousness • Tips for getting a college basketball scholarship • Living with Pseudotumor cerebri (PTC) • Caring for the caregiver • Technologys impact on society