Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

Full Bio →

Written by

Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

Full Bio →

Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 26, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Key takeaways...

  • Auto insurance premiums are strongly influenced by the person driving the vehicle and the type of vehicle covered
  • The vehicle type, make, model, specifications, and ISO rating will all have a serious impact on your insurance rate
  • If you have any violations or accidents and you’re rated as a primary driver, it will change the vehicle’s rate
  • When your rates are calculated, the total that’s charged is organized by vehicle and not by person
  • Adding additional operators who drive occasionally may not have a major impact on your rates

So much focus is put on finding the best auto insurance rates. In fact, one of the main reasons that people shop around is to find what they consider a deal.

Unfortunately, there’s so much attention placed on the total policy premium that some consumers don’t take the time to learn how their personalized quotes are actually calculated.

How your personalized rate is calculated is extremely important. It’s the process that’s used that enables you to save money in the end. It’s not solely the car or the person that is charged a rate, it’s both.

In fact, it’s more than just the drivers and the cars that are on a single policy that influence the final rate.

Compare car insurance quotes today by entering your zip code into our free rate comparison tool above.

Do all insurance companies charge the same rate?

Dollarphotoclub_103413467 (1)-1600x1600 (6)

If all insurance companies charged consumers the same rate, it wouldn’t be a competitive marketplace. Licensed companies have the freedom to set their own rates.

As long as the rates that the company sets are not discriminatory in nature, the premiums will be approved.

The reason that experts tell you that you should shop around for the best rate is that companies use different methods to calculate how much each unit of insurance should cost each driver in each rating class.

As a driver and an insurance consumer, give yourself the power and shop to find the insurance company with the fairest rate.

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

How does the car influence the rate?

You’d think that when you’re buying car insurance, the rate charged would only be affected by the car. After all, the coverage that’s provided protects you when you’re driving the covered auto that you list on the policy.

The type of car that you drive will play a role in your personal rate factoring.

There are a few different ways that your vehicle type is going to dictate what you’ll spend each month for coverage. It’s not uncommon to pay more to insure a sports car than a standard compact car because it costs more to fix a sports car and it travels at faster speeds.

The most common method to rate a vehicle is to use the car’s ISO rating.

What is an ISO rating?

AdobeStock_107417448-1600x1600

Insurance companies wouldn’t be able to decide how much to charge their customers if they didn’t have data and statistics to review. There are so many different numbers that have to be crunched to assess how likely each group and subgroup is to have a loss.

When it comes to your car, all of the data is compiled and this is how an ISO rating is compiled.

A risk solutions company called VeriRisk is responsible for setting the ISO rating system. It’s called the ISO rating because it stands for Insurance Service Office. By compiling information about each model, the company can create a symbol.

Compare Car Insurance Companies

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

There is a physical damage symbol and a liability symbol. Here’s what’s used to create the symbols for each individual make and model:

Liability and Medical Payments Symbols

Cars that cause more damage to other vehicles or injuries to vehicle occupants need to carry a higher premium because there’s a higher risk of loss in the car, and the risk that the payment will be high goes up because of past claims that have been filed.

Here are some pieces of information used to come up with a liability symbol:

  • Vehicle size and construction
  • Related characteristics
  • Vehicle’s insurance loss experience for liability claims
  • Vehicle’s insurance loss experience for medical payments and Personal Injury Protection claims
  • Predicted future loss-ratio

Physical Damage Symbol

When a car is first manufactured, all they have to go off of is the vehicle’s MSRP. It’s the suggested retail price that all preliminary scores are based on.

After there’s time to compile data, adjustments are made and the actual Physical Damage rating symbol is adjusted and the price can go upward or downward.

Some of the factors that determine this include:

  • The vehicle has a high theft rate and it’s attractive to thieves
  • The vehicle is involved in more collisions than the average car
  • The vehicle costs more to repair because of the parts of the labor
  • The vehicle’s loss experience for physical damage claims

How does the driver on the policy affect the rate?

AdobeStock_40672072-1600x1600

Your vehicle can affect how much you pay for liability, comprehensive, collision, and medical payments coverage. If you buy a safer vehicle, it could help you keep your premiums low, but that doesn’t mean that the driver on the policy has no bearing.

In fact, who is listed as the primary driver can really impact the rates.

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

What type of impact does a primary driver have?

Primary drivers are individuals who are rated on the policy and who have regular access to the car. Since they are the ones who will be using the vehicle the most, they will have the biggest impact on how much the named insured pays to insure the car.

Here are some of the factors that are considered when rating a driver:

  • The driver’s age
  • How long the driver has been licensed
  • The driver’s gender and marital status
  • If the driver has any violations in the last three years
  • If the driver has any at-fault accidents

As you can see, it’s a combination of factors that helps the company determine what is the best rate. How you use the car and where it is stored can also be considered.

Now that you have a basic understanding of how rates are set, you can shop around online to compare instant quotes and get the best deal. Enter your zip code into our free tool below to begin comparing.