What affects auto insurance costs?

An insurance advisor can help you understand the factors insurance companies use to determine how much your protection will cost. They can also discuss available discounts to reduce your premium. Some of the characteristics impacting the cost are:


  • The type of vehicle you drive. Typically, the more expensive the vehicle, the more it will cost to insure. Vehicle safety ratings (availability and cost of repairs etc.) also influence the rates charged for a particular vehicle.
  • Your location. Because of increased risks of theft, vandalism or accidents, urban drivers typically will pay more than rural drivers.
  • The distance you drive. If you drive longer distances or use your vehicle for business, you typically will pay more.


  • The number of vehicles on a policy and additional policies (such as homeowner or renters) with the same insurance company can earn you discounts.
  • The deductible you choose. If a policyholder is willing to take on a portion of the risk in the form of a deductible, the company will generally offer a discount. It demonstrates the policyholders willingness to pay for the smaller loss and to share in the risk with the insurance company.
  • Your age, marital status, and gender. Insurance companies collect data to identify characteristics that demonstrate more or less likelihood of a loss. Your Advisor can help explain these characteristics and potential impact.
  • Your driving record. Insurance companies have access to information on driving and claim records. This is used to help determine eligibility and cost. A better driving record will typically be reflected in the cost.
  • Your credit history. Because there is a correlation between a driver's credit history and auto insurance losses, most insurance companies use this data to help determine rates.

How will a teenage driver affect my insurance?

Getting a driver's license is a rite of passage for most teenagers and it is important to make sure new drivers understand the importance of safe driving habits. Higher premiums are usually charged for auto insurance because there are more risks associated with new or teenage drivers. Good, safe driving habits with no traffic violations will keep premiums from increasing and many companies offer discounts for students who maintain a higher grade point average.

Depending on your situation, you may wish to consider the additional protection that can be provided by an umbrella policy. Your Insurance Advisor can explain the features of an Umbrella Policy and the added layer of protection it provides above and beyond what your auto and home policies cover.

We can help

If you have questions about auto insurance, visit one of our branches or call us at 1-800-443-6316.

Insurance products are offered through Think Insurance (MN license # IA-538), not Think Mutual Bank. Insurance products are not FDIC insured, are not insured by any federal agency, and are not a deposit or guarantee of Think Mutual Bank.
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Insurance products are offered through Think Insurance (MN license # IA-538), not Think Mutual Bank. Insurance products are not FDIC insured, are not insured by any federal agency, and are not a deposit or guarantee of Think Mutual Bank. This is not a policy. For a complete statement of coverages and exclusions, please see the policy contract.

The financial advisors of Think Financial Planning offer securities and advisory services through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Investments are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Funds are subject to investment risks, including possible loss of principal investment. Think Mutual Bank is not a registered broker-dealer or Registered Investment Adviser. Think Mutual Bank and Commonwealth are separate and unaffiliated entities. Fixed insurance products and services offered by CES Insurance Agency, Think Insurance, or Think Financial Planning. Think Financial Planning is headquartered at 5200 Members Pkwy NW, Rochester, MN 55901. Check the background of this firm on FINRA's BrokerCheck.

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