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Factors that Affect Your Premium

Insurance companies use a process called underwriting to decide whether to sell you a policy and what rate to charge you. Companies must file their underwriting guidelines with the Texas Department of Insurance (TDI) and update them each time they make a change. The factors companies typically use to set premiums include:

  • Your age and, for younger drivers, your marital status. Men under 25 and unmarried women under 21 have the highest rates. Drivers over 50 may get discounts.
  • Your driving record and claims history. A good driving record can save you money. Insurance companies will charge you more if you have accidents or tickets on your driving record. Companies may also charge more for major convictions, some driving violations, and accidents that damage property. Some surcharges are mandatory and will apply to your premium for three years.
  • Where you keep your car. Rates are typically higher for people who live in cities because they have more accidents and auto thefts than people who live in rural areas.
  • Your car's type. Collision and comprehensive rates are highest for luxury, high-performance, and sports cars. Rates may also be higher for cars that damage easily or cost more to repair.
  • Your car's primary use. Your rates will be higher if you drive your car to and from work or for business. Rates are lowest for people who only drive for pleasure.
  • Your credit score. Companies often use your credit scores to decide if they want to sell you a policy and at what cost. A company can't refuse to sell you a policy or cancel or nonrenew your policy based only on your credit. Visit the Learning Center on HelpInsure.com, a website maintained by TDI and the Office of Public Insurance Counsel, to find out which companies use credit scores and how they use them.
  • Whether you drove uninsured in Texas. Companies may charge more if you drove without insurance in Texas for more than 30 days in the 12 months before you applied for insurance. If you didn't, a company can't charge you more for liability coverage because of your prior lack of coverage.
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