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How Are Car Insurance Rates Determined?

July 26, 2019

How car insurance companies come to arrive at your rate is dependent on a variety of factors. In general, car insurance companies perform a risk assessment to determine how much to charge you. They also use a wide range of data and other reports as they formulate a quote specific to you and your vehicle.

Car insurance companies look at the following information in order to determine your rate. This list is by no means all inclusive but covers the most common factors.

  1. Your Age: The simple rule of thumb is that the younger you are, the more your car insurance will be. With age comes experience and many car insurance companies believe that the older you are, the less likely it is that you will be involved in a car accident.
  2. Type of Coverage: If you need full coverage, your car insurance premium will be higher than if you opt for a liability-only insurance policy. Because the requirements for types of car insurance vary from state to state, you should find out the minimum car insurance requirements for your state before you purchase.
  3. How You Utilize Your Motor Vehicle: If you use your car for business every day, you may pay a higher car insurance premium. If you only drive for pleasure, or to run errands, you will be driving less. Therefore, your car insurance premium may be lower. Most people in Texas use their cars to drive to work, which would place you in between pleasure and business use.
  4. How Many Miles You Drive Each Year: The number of miles you put on your car each year may be a factor when computing your car insurance premium. If you put a lot of miles on your vehicle every year, that means you are spending more time driving and the odds of you being involved in a car accident increase, thereby raising your premium.
  5. Are You Male or Female? Statistically speaking, women are safer and more prudent drivers than men. So, a man may pay a higher car insurance premium than a woman of the same age.
  6. Where Do You Live? This is commonly called the “garage address.” This is where you park your car every night. Car insurance rates in a city can be higher because there is more traffic and your likelihood of being in an accident can increase compared to the suburbs or country roads.
  7. What Kind of Car Do You Drive? The more expensive the car, the higher the car insurance premium you may pay. It’s important to know that this is only the case if you want physical damage coverage. If you don’t choose this option, that means that your car insurance company is not responsible for the repair or replacement of your vehicle if you are involved in an accident.
  8. Are You Married? This factor is generally applied to men. Unmarried men are normally younger and are statistically more likely to be involved in a car accident than married men. As a result, unmarried men may pay more in car insurance premiums than married men.

Regardless of how much you’re paying for a premium, insurance is there to protect you and others in the event that you’re involved in an accident. Unfortunately, auto insurance companies are not always on your side following a car wreck, and they have teams of highly trained lawyers, insurance adjusters, and investigators whose job is to deny or minimize insurance claims.

For this reason, you will need the guidance of an experienced Texas car wreck attorney if you’ve been in an accident. Besides handling all the legal work, which allows you to focus on your recovery, an auto accident attorney will represent you during settlement negotiations, protect you from tactics used by insurance companies to deny or limit claims, and ensure that you receive the compensation you need and deserve.

If you’ve been involved in a Texas car wreck, then you should contact the team at Fears Nachawati. Our firm has helped thousands of Texans following their auto accident, and we offer a free, no-obligation legal consultation to discuss the details of your accident and what an attorney can do for you. Please call (866) 705-7584, or visit the offices of Fears Nachawati located throughout the great state of Texas, including in Houston, Dallas, Austin, Fort Worth, and San Antonio.


Use the form below to send us a note, call us at 214.890.0711 or chat with us live. We are eager to help with your legal needs. Please keep in mind that any unsolicited information sent through our website cannot be treated as confidential. Contacting us through this site does not create a representation relationship with Fears Nachawati.

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