What Really Drives Up Your Car Insurance Costs?

Car insurance isn’t just about how well you drive. While age, location, and driving history are well-known factors that affect your premium, there are several other things that can quietly push your rates higher—even if you’ve never been in an accident.

For example, a young, single driver in a fast car living in a busy city is likely to pay far more than an older, married driver in a small town. That’s because insurance companies look at risk, and younger drivers, especially men under 25, are statistically more likely to be involved in accidents.

But even someone with a clean record can end up with a high premium depending on how they use their car. If you drive a lot of miles each year—especially over 15,000—or use your car for work-related errands or deliveries, insurers may charge commercial rates. Those can be much more expensive than personal policies.

Where you live also matters. People in cities usually pay more than those in rural areas. That’s because urban drivers face more traffic, a higher risk of accidents, and greater chances of theft or vandalism. More cars on the road mean more chances something could go wrong.

Another surprising factor is your credit score. In many states, insurance companies are allowed to use credit history when setting rates. The logic is that a lower credit score might suggest less financial responsibility, which insurers see as a possible risk. It might seem unfair, but it’s legal in many places and can have a big impact.

The number of insurance claims you’ve filed also matters. Even if the claims weren’t your fault, a long claims history can flag you as a high-risk driver in the eyes of your insurer.

And then there’s the state you live in. Some states have laws that make car insurance more expensive across the board. For instance, Michigan’s no-fault insurance system requires drivers to carry extra coverage, which can lead to some of the highest premiums in the country. Other states, like Louisiana, are known for frequent lawsuits and court rulings that tend to favor plaintiffs. According to the American Tort Reform Foundation, this legal environment can drive up costs for everyone by making claims more expensive to settle.

In short, car insurance pricing is about more than just accidents and speeding tickets. How far you drive, your credit score, where you live, and even your state’s laws all play a role in what you pay. Knowing what affects your premium can help you shop smarter—and maybe even lower your rate.