Car insurance pricing is one of the things nobody grasps. There is no standard formula that insurers use to price their premiums, as insurance companies rely on a combination of factors to determine what rates to apply for every policyholder. 

With this kind of ambiguity, it is possible to feel lost as to why your insurance premiums keep rising. But worry not, as this guide explains why your premiums could be so expensive and how to get better rates.

Your Age

If you are getting insurance for your first time as a teenager or buying coverage for your teen child, you can expect to pay way more than you would for a 25-year-old. Adding your teen to your family insurance coverage can increase your premium by more than 100%.

Teens are deemed risky drivers, which explains the high cost of premiums. Some states have different rates for male and female teens, with males paying more in premiums. The rates stay up for young drivers and reduce yearly until they are 25, where they enjoy standard rates as long as they maintain a clean record.

Your State

Virtually every state in the US has a minimum allowable coverage for all drivers. As a result, premiums for car drivers in different states can vary widely. States with the highest rates include Delaware, Louisiana, New York, Georgia, and Maryland.

Other states, like Ohio, have some of the lowest rates in the country. The average cost of full coverage in Ohio can be as low as $1200 per year and $336 for minimum coverage. But even in a state like Ohio, the rates can increase significantly if you are a young driver. 

If you want the cheapest car insurance in Ohio, irrespective of age or driving history, an online insurance comparison tool like Market Watch can help. Online insurance comparison tools do the heavy lifting and give you a refined list of the best providers. 

Driving Record

If you have had a claim made against your car insurance, you can expect your premiums to increase significantly. But you could enjoy accident forgiveness if you have had an extended accident-free record. 

You do not have to have caused an accident to increase your premiums. Tickets against your license can cause your premiums to increase. The worst you can have on your record is a DUI conviction which can result in license revocation. If your license is revoked, you may be required to carry SR-22 insurance that can significantly increase the cost of your premiums. 

Your Car

If you have changed cars, you can expect your premiums to change based on the type of car you own. Expensive cars will mean that the insurer will have to part with more to repair them or replace them after an accident. 

As a result, they will adjust the premiums to match the risk. If you do not want to pay high premiums, you can drop your full coverage and get minimum coverage. But not having full coverage for an expensive vehicle can be a significant risk as you would have to pay for its repairs or replacement out of pocket after an accident. 

Credit Score

If you have not caused an accident, changed cars, or earned points on your driving license but have your car insurance rates increase every year while they should be going down, your credit score could be the culprit behind the increase. 

Car insurance companies sometimes use a credit score to determine car insurance rates. The reasoning behind credit score rating as a factor is that people with poor credit scores are more likely to file a claim than their good credit counterparts.

If you suspect that your credit score could be affecting your cost of insurance coverage, it may be time you started working on it if you hope to see your premiums reduced.