There are many factors that determine the cost of car insurance. Some are in the control of the driver and some are not. Drivers must understand that like any business, the insurance company has to remain profitable, in order to do that, premiums must outweigh the amount of claims filed. No longer are insurance companies relying on large investment profits, but more on the premiums that come from everyday drivers. Furthermore, a spokesperson for RACV Insurance, one of the largest insurers boasting over one million customers, says that theft of automobiles are on the rise, in Victoria alone, an automobile is stolen every sixteen minutes. Because of the weak Australian dollar and the increase in car theft, this too will affect premiums, causing them to rise substantially.

Car insurance premiums or rates are figured based upon several other personal factors, as well. Age of the authorised drivers is a major factor when calculating premiums. The younger you are the more of a risk you are perceived to be. This is due to the overwhelming statistics that have proven that drivers under the age of 25 are more susceptible to road crashes and file more claims than older drivers. One opportunity that younger drivers may have in lowering their insurance premiums is enrolling in a defensive driving course; many insurers offer up to 20% off premiums when young drivers complete these courses. It's a good idea to ask your provider if these classes and courses could lower your premium prior to enrolling.

Gender also plays a role in insurance premiums; some insurance companies offer young women lower rates than their male counterparts. Statistics show that female drivers at younger ages have better driving records than young males. As well, many insurance companies will have lower premiums for married couples than individuals with identical driving records.

Other common factors that affect the amount of insurance you may pay are those related to geography. Drivers living in areas where there is little traffic usually spend less on insurance than those living in congested cities or suburbs. Furthermore, the crime rate for thefts in certain areas may be higher than other regions; this too can play a role in the cost of your premium.

Perhaps the most significant factor that affects your premium costs are those that are in your control. The number of driving violations on your driving record plays a major factor in insurance rates. Individuals with speeding tickets, DWI, reckless driving citations and other violations of road rules can cause your premiums to skyrocket. Most insurance companies can penalise a driver for up to five years after the initial violation. As well as driving citations, insurance companies will also take into account the number of claims that a driver has filed. If you have filed a claim resulting from a collision, theft, and even fire; your insurance will most likely increase; and in some cases an insurance company may even choose to cancel your policy at renewal.

Other common factors that may be viewed by insurance companies surround the vehicle itself. For example, cars that are at higher risk of theft often are more costly to insure. If your car has modifications or expensive rims your insurer may increase the premium, as well. Many car insurance companies will also look at your present credit rating, if you have a poor or even no credit rating, your premiums may be higher. Other factors such as the distance to and from work, the miles per year that the vehicle will be driven, the current amount of licensed drivers that are in the home, years of driving experience, whether or not you currently have automobile insurance, any types of anti-theft devices that are on the car, as well as the number of cars that you will be insuring; some of these factors will increase your car insurance rates, while others may lower premiums.

One way to decrease the premiums you pay every year is to look at the amount of excess you are willing to spend versus the premiums. Excess is the amount of money that the driver will have to pay out of his pocket if a claim is filed, usually most insurance companies suggest carrying a policy with a $500 excess, however, by increasing the amount of excess; you will lower your premiums.

Drivers that have no claims for five years are also given discounts on their premiums. In many instances, these discounts can amount up to halve off original rates. Therefore, you should always weigh your options when filing a claim, sometimes it's better to pay for the damage out of your pocket than file a claim with your insurance provider; in the long run, you will save money.

Consider your options when shopping for car insurance, but better yet, remain loyal to companies that have worked with you well in the past. Many insurance companies will offer long-time customers lower premiums, especially those that have home, health, or life insurance with them, as well. In order to find the discounts available to you, always ask questions and be honest with your answers. Consider the type of policy that is needed, too. As your car depreciates, you may want to switch your policy from a comprehensive plan to a third party personal property plan with the added option of theft and fire. It's worth checking into.