The type and cost of the vehicle are often significant factors in determining car insurance premiums. A more expensive car is more costly to repair, and therefore insure, and will generate a larger claim if damaged or stolen. Insurers will also consider safety tests and records for the vehicle. Premiums can be reduced with the addition of certain safety features like anti-lock brakes and anti-theft devices.

Drivers typically pay less for car insurance if they have a clean driving record. Inversely, a record of accidents and traffic violations will increase premiums. Every state has  their own regulations on how far back insurance companies can look (“look-back period”) to find records that might affect your premiums. This serves as an incentive for drivers to work to improve their driving histories. Even with a poor driving record, there are car insurance companies who may provide affordable coverage.

Auto insurance premiums will also vary depending upon the type and limits of coverage chosen. For example, if you have a much older vehicle you may decide you don’t need collision coverage if your car is damaged. Most states have minimum requirements for your liability coverage, typically as low as $25,000 per accident and $50,000 as an annual total. Many experts however recommend much higher limits to fully protect against catastrophic accidents that injure others.

Insurers are strong proponents of the adage that the past predicts the future. Claim history will follow a driver and if the driver has a history of prior claims, particularly claims which were the applicant’s fault, carriers will almost certainly increase premiums. This is to prepare for the greater risk of insuring someone who may be more likely to have additional claims.

A credit-based insurance score is similar to a regular credit score used by lenders, though it considers fewer of the factors in the calculation. As with a poor claims history, car insurers feel that a poor credit score may indicate a greater risk that premiums won’t be paid on time. Additionally a car insurance company often believes that credit scores reflect a person’s overall level of responsibility. However, some states do not permit the use of a credit score in writing auto insurance.

The location where an insured vehicle will be used most often, and parked, will impact car insurance premiums. Experience has shown insurers that high crime areas are more likely to generate more car theft and the type of dangerous driving which causes accidents. For these reasons, often, car insurance can vary significantly from one zip code to another.

Not surprisingly, a number of states have now expanded non-discrimination laws to add gender to race and religion as a prohibited factor in setting car insurance premiums. Recently, California made the practice illegal. This is actually good news for young men, because they typically pay higher premiums than women.

All car insurance companies offer discounts that can make coverage more affordable. These include:

• Safe driver discounts,
• Safe vehicle discounts rewarding features like anti lock brakes,
• Multi car discounts, 
• Discounts for taking defensive driving classes,
• Low mileage discounts, and
• Discounts for lump sum payments and going paperless.

There are also a number of discounts that are less well known or advertised such as away from home student discounts, discounts for energy efficient cars and long time customer discounts.

The only way to effectively assure that you are getting the best car insurance at the best price is to obtain a number of quotes from the better companies in your state and area. There are three overlapping factors that determine your premiums — various risk factors, the different ways insurance companies weigh those risks, and the discounts offered by insurers. By carefully comparing quotes, you can find the specific policy that fits best for you.

Most car insurance companies will offer a discount if you purchase more than one type of insurance policy from the company. Bundling home and auto insurance is one of the most common forms of these combinations.

With bundling, you can simplify the administrative process for your insurance company and yourself. Typically, you will get one insurance schedule and the billing cost savings for the carrier are passed on to you. And of course, you won’t have the additional red tape that comes with dealing with two separate companies.

There are a number of companies which offer excellent bundling options. For example, State Farm offers solid overall car insurance with very favorable bundling options. Liberty Mutual also offers good bundling options with a user-friendly website to assist in the shopping process.

As always, it is important to do your homework and compare quotes to find the best bundling options for you.

Which is the best auto insurance company? It’s difficult to say which auto insurance company is the best. Every insurance company has their strengths and weaknesses, and each company is best suited to a specific type of driver. Based on our research, Amica is the company with the best overall score.

Every insurance company has its downsides. Some only offer basic coverages, some offer very few discounts, and many companies struggle with customer service. There isn’t one company that stands out as the worst.