Your auto insurance price is built from expected loss costs (how often and how much claims will cost across liability, collision, and comprehensive) plus insurer expenses and profit, refined by state‑regulated rating variables. In 2025, premiums remain elevated because claim severity has stayed high even as some crash frequency metrics improved. Industry data show double‑digit year‑over‑year increases in the “motor vehicle insurance” price index through late‑2024 into 2025 (BLS CPI), record repair costs and longer cycle times from parts complexity and ADAS/EV calibrations (CCC Crash Course 2025), persistently high theft activity (NICB), and unusually costly severe convective storms damaging autos in hail‑prone regions (Swiss Re sigma). This guide translates those market drivers into the specific factors that influence what you pay.
How Insurers Price Your Premiums
Insurers estimate your expected claims and add expenses, using rating variables permitted by each state (e.g., territory/garaging location, vehicle attributes, driving record, mileage, prior insurance). In 2025, the heaviest weights fall on micro‑location risk, vehicle repair/replacement cost, actual driving behavior/miles (including telematics), and the medical/legal cost environment (AM Best 2025 outlook). There are certain factors you can influence, like your credit tier (where allowed), mileage or telematics participation, and the type of car you drive, while others—such as local weather/hail exposure or your state’s legal environment—are outside your control. Persistent severity inflation documented by market data continues to push indicated rates higher (CCC Crash Course 2025; BLS CPI).
Common Factors that Influence Price
Below are the variables most correlated with premiums today, with current research on why they matter and how they are changing. Telematics programs that track mileage and driving behaviors are expanding across the market and can apply participation‑based discounts or debits that more closely align price with how you actually drive (CCC Crash Course 2025; LexisNexis 2025 Trends).
Location
Where your car is garaged and driven remains one of the strongest predictors of loss cost. Micro‑territory factors—traffic density, speeds and road design, crime, weather, and local legal/medical costs—drive sharp differences. Nationally, auto insurance prices rose 19.1% year over year in September 2024, reflecting multi‑year severity pressures that filter into state and metro premiums (BLS CPI news release). Weather is a major driver: 2024 was again among the costliest years for U.S. severe convective storms (hail, wind, tornadoes), which disproportionately damage vehicles and keep comprehensive rates elevated in hail‑prone regions like the Central/Southern Plains and the Front Range (Swiss Re sigma). Theft risk is also highly localized; more than 1,000,000 vehicles were stolen in 2023, and theft‑prone metros and models see higher comprehensive charges (NICB). State averages also diverge: NAIC‑based analyses show the highest‑cost auto states often run roughly twice the average expenditures of the lowest‑cost states, with dense coastal and Gulf states tending to be higher than many rural Northern/Plains states (Triple‑I/NAIC). Depending on your coverage levels, local theft, vandalism, hail, and storm losses can materially affect your comprehensive and, indirectly, overall premium.
Driving history
Recent violations and at‑fault crashes are among the most powerful individual rating variables. Major violations like DUIs and reckless driving typically trigger the largest surcharges, while minor speeding tickets generally have smaller effects. Insurers place the most weight on recency and severity when projecting your risk (Insurance Information Institute). Broader road‑risk indicators have improved somewhat—traffic fatalities fell about 3.6% in 2023 vs. 2022—but remain above pre‑pandemic levels (NHTSA 2023 estimates).
Claim history
Multiple or recent at‑fault claims signal higher expected loss costs and often lead to higher premiums, even if the individual claims were small. A clean recent history typically earns better pricing, while frequent small comprehensive or collision claims can still push rates up depending on state rules and carrier filings (Insurance Information Institute; AM Best 2025 market outlook).
Gender
Where permitted, insurers may reflect observed loss differences by sex—effects that are typically most pronounced among younger drivers—but gender’s use is increasingly constrained. California’s auto rating law specifies allowed factors and does not authorize gender, effectively prohibiting it (California Insurance Code §1861.02). Some jurisdictions have moved away from gender altogether (e.g., British Columbia’s public insurer does not use gender) (ICBC). Regulators are also tightening oversight of models and external data to prevent unfair discrimination, including on the basis of sex/gender (Colorado DOI SB21‑169). One reason gender can affect your insurance premiums in some states is that loss outcomes differ across groups at certain ages; however, the legal landscape is shifting toward greater scrutiny and, in some places, prohibition.
Age
Age remains widely used in U.S. auto rating because crash risk changes with driving experience and life stage. Young drivers (especially under 25) typically face higher premiums; rates often decline with experience and then can rise again at older ages as injury severity risk increases. While 2023 traffic fatalities declined about 3.6% vs. 2022, they remain above 2019 levels, indicating that overall road risk has not fully reverted to pre‑pandemic conditions (NHTSA; Insurance Information Institute).
Credit history
Most insurers use credit‑based insurance scores (CBIS) where allowed because they predict loss propensity. Nationwide analyses in 2025 find that drivers with poor credit typically pay about 50%–80% more on average than drivers with good credit for full coverage, and the gap can widen to roughly 80%–130% versus excellent credit; impacts vary by state and insurer (Bankrate 2025; ValuePenguin 2025). A few states prohibit credit in auto rating—California, Hawaii, and Massachusetts—so these differentials do not apply there (NAIC; III). Improving credit can lower premiums where permitted, subject to state rules on use and adverse‑action notices (NAIC). Insurance might seem unrelated to credit scores, but in practice CBIS commonly influences eligibility, tier, and price within state‑regulated limits.
Vehicle
Insurers translate VIN‑decoded attributes into coverage‑specific symbols and loss relativities that reflect performance, MSRP/parts costs, safety/ADAS content, repairability, and theft exposure (Verisk ISO Symbols). ADAS features such as automatic emergency braking and blind‑spot detection reduce certain crash types, lowering frequency, but the needed diagnostics and sensor/camera/radar calibrations add cost and time, keeping collision/comprehensive severity elevated (IIHS; CCC Crash Course 2025). EVs often show lower injury claim frequency for their occupants but higher physical‑damage severity due to battery and parts/repair constraints, which can raise collision/comprehensive premiums versus comparable ICE models (IIHS: Electric vehicles; CCC Crash Course 2025). Theft exposure varies sharply by make/model/year and directly influences comprehensive charges (NICB Hot Wheels). Driving a sports car, for example, will spike your auto insurance cost because high performance correlates with higher collision risk and expensive repairs.
Home ownership
Homeownership is a much smaller and often restricted factor today. Some states prohibit its direct use in auto rating—for example, Michigan’s reform bars insurers from using home ownership status—and California’s Proposition 103 limits rating to specified factors that do not include homeownership (Michigan DIFS; California Insurance Code §1861.02). Where any savings exist, they are typically tied to multi‑policy bundling rather than ownership alone (Insurance Information Institute; NAIC consumer guidance). Focus on core drivers (location, vehicle, driving/claims history, mileage) and bundling opportunities—not buying a home for insurance savings.
Marital status
Marital status still affects auto premiums in many states, typically with modest savings for married drivers (often about 5%–10% on average), though the effect varies by age, state, and insurer and is smaller than core factors like driving record and vehicle (Bankrate 2025; Insurance Information Institute). Some states restrict or prohibit the use of marital status in auto rating (for example, Michigan) (Michigan DIFS). Even your love life seems to have an affect on your car insurance rates earlier in life—but expect continued regulatory scrutiny of non‑driving factors and growing alternatives like telematics‑based pricing (CCC Crash Course 2025).
What’s Next?
- If you fall into a category that would tend to drive your premium higher, you may want to look into insurance companies that are known to offer more competitive rates for that factor. Consider enrolling in a telematics/usage‑based program, which many carriers now use to apply participation‑based discounts or debits tied to your actual driving (CCC Crash Course 2025).
- Learn everything you need to know about auto insurance quotes. Shop multiple carriers and check state rules on rating factors; national price levels remained elevated into late‑2024 (BLS CPI).
- If you’re looking to stay covered on a budget, check out our review of the Best Cheap Auto Insurance Companies. Savings levers include choosing vehicles with lower repair complexity/theft risk, higher deductibles where feasible, bundling, and maintaining a clean recent driving record (CCC Crash Course 2025; NICB Hot Wheels).
- Dive into the details of car insurance rates for millennials with our Millennials and Auto Insurance report. For broader context on safety trends affecting young drivers, see NHTSA’s update showing a 3.6% decline in U.S. traffic fatalities in 2023 vs. 2022 (NHTSA).
