Your insurer has its own formula for arriving at your premium. In fact, every insurance company has its own formula. That’s why you get different quotes from different insurance companies for the same coverage. Let’s learn more.


There are a lot of factors that affect your premium. Things like your driving history, the type of car you drive, your credit history matter to insurers. Then, there are external conditions like local weather trends, history of theft, accidents, and vandalism in your area, etc. These are also used to understand the level of risk while setting your premium.

Regular Checks

Most people that switch insurers tend to find the same coverage at a better price. That means that you, too, should shop for quotes when policy renewal is around the corner. If you’re a good driver, you’re likely to get good offers. You may think you’re getting a loyalty discount, but thanks to price optimization, insurers know they can charge you more while claiming to help you save.


Look for options when you go through a significant life change. Things like marriage, divorce, moving, insuring a teen, commute reduction, and adding a car or driver to the policy all count as significant changes. Ask insurers how much these changes will cost or save you. Remember to calculate for depreciation too.


Choosing a top-rated insurer is a safe bet. Look for carriers that are known for fair and fast claim settlements, offer excellent nonclaims service, help review your policy, and are proactive with help and advice.

Don’t Skimp Liability

Liability coverage pays for bodily injury and property damage you cause to someone else. It makes sense to buy more than the legal minimum. Consider an umbrella liability policy that covers your car and home along with additional protection. Also, it’s a good idea to get uninsured and underinsured motorist coverage for your safety.

Other Savings

Setting a higher deductible can help save on your premium as long as you can afford to pay the deductible. Cancel collision and comprehensive coverage in case your old car is not worth over ten times the premium amount.