Auto insurance calculation is a complex. Your auto insurance premium depends on a number of factors which can be split into the following broad categories.
Factors Effecting Auto Insurance Premium
Who You Are
Auto insurance companies love to know about you before they sell you auto insurance. They want to know stuff like your education and work profile, where you live and whether you are single or married.
Even factors like the number of years with your current employer will decide how much you will pay for. So it is no surprise that your credit history is also a factor.
Your Sex and Age
Guys pay more when it comes to auto insurance (Source: This MSN article). It breaks the old stereotype of women being riskier drivers. Age can dramatically influence the cost of insurance. Auto insurance is expensive for teens and young adults. If you have a less than three year old licence then be ready to pay more. In some states adding a young adult to an auto insurance policy can be prohibitively expensive.
But if you are a good student (which usually means satisfying a GPA criteria) you can get a discount. Some insurance companies also offer a discount to young adults who successfully complete a safe driver program.
Your Driving History
Driving history is a key factor. Safe drivers pay much less premium than drivers with at fault accidents and driving (usually over speeding) tickets. The difference can be quite substantial, usually a few thousand dollars per year. If you have a driving ticket which has fallen off your record you should renegotiate your auto insurance.
Insurance companies simply charge more in some states than others. The cost of auto insurance in a state depends upon many factors. Bankrate.com has this very interesting article on state wise comparison of auto insurance cost.
The Car You Drive
Obviously the cost of auto insurance will depend on the car. Cars which have safety features get a discount. Cars which are easily damaged cost will cost more to insure than those which are sturdy. As a rule of thumb a car with plastic body costs more to insurance than a car with sheet metal body.
Finally The Company
Some carriers charge more than others for the same coverage. Usually the companies which advertise more charge more. How else do you think the cost of that neat ad with a basketball star is recovered? If you search around you will find a relatively unknown company with a good customer service track record willing to offer you good coverage at a much lower cost than some better known companies.
An Interesting Infographic
Visual.ly has this very interesting infographics on what determines car insurance rates. Click on the image below to enlarge it.