By BankingMyWay.com Staff
When shopping for auto insurance, it helps to know exactly what goes into determining your premium. Premiums vary greatly from one person to another and from company to company. In order to assure you are getting the best deal, you have to have an understanding of how your premium is calculated.

Here are some of the factors that auto insurers consider:

• Age: Insurers use accident statistics to determine how risky each age group is. Teen and young adult (under 25) drivers as well as elderly (over 65) drivers are the most likely to have accidents, so they will have to pay more for auto insurance.

• Gender: Women generally have fewer accidents, so they may get a break in insurance costs.

• Marital status: If you’re married you will pay less than if you were single, all things being equal.

• Where you live: Insurance rates vary significantly by region, mainly because some areas have more risk threats than others. Rural areas where there are fewer cars and less congestion typically have lower rates. Cities like Los Angeles where there are a disproportionately large number of cars and more traffic have higher rates.

• Vehicle type: What type of car you drive makes a difference. Performance cars that you are more likely to drive at a faster speed, for example, will cost you more to insure. Likewise, cars that have high rates of theft will also require higher payments. On the other hand, if your car has safety measures and anti-theft devices, you can save on your premium.

• Accident history: If you have a history of getting into accidents and filing insurance claims (whether or not the accident is your fault), you will pay for in it in your insurance premium. Some insurers look more closely at your recent driving record, however, so if you had some fender benders when you were a teenager, it may not count against you.

• How you drive: If you have driving violations like speeding tickets on record, this will identify you as a potential accident risk to insurers. If you have a clean record in recent years, however, you may be absolved.

• Your credit rating: It may seem random, but insurers look at your credit report when they process your application. If you have poor credit, insurers take that as an indication of a lack of responsibility that may spill over into your driving habits. Consequently, you may have to pay higher rates.

• Occupation: Believe it or not, there is a link between your job and your insurance risk, at least statistically. For example, if you work from home you won’t do as much driving, so your risk of having an accident will be lower.

• Education: Those who have obtained higher levels of education pay lower insurance rates. You can also get credit for driver’s education classes, and student drivers who have higher GPAs cost less to insure.

• How you use your car: The more mileage you put on your car each year, the higher your insurance premium will be. Also, cars used for business and for commuting to and from work cost more to insure than strictly leisure cars -- work cars tend to face heavier traffic conditions.

To compare rates from auto insurance lenders in your area, visit the Insurance Center at BankingMyWay.com.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.