A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Here's what you need to know...

  • Car insurance companies evaluate your risk when determining your premium to protect their bottom line
  • Several factors go into determining your auto insurance premium.
  • A criminal conviction can potentially increase your premium, require you to obtain SR 22 insurance, or cause your insurance company to drop you

There are many different factors that can affect your insurability and your car insurance premium. To add to the confusion, these factors can vary from one auto insurance company to the next. A criminal conviction can potentially cause a car insurance company to drop your coverage or to raise your premiums.

If you have found your car insurance rates to be unaffordable or simply higher than you think they should be, consider using an online car insurance price comparison tool. These tools make it easy to compare several different policies and rates to ensure you are getting the best car insurance premium possible. Now drivers can take a few easy steps with a price comparison tool to compare auto insurance premiums and companies online and choose what is best for them. Compare car insurance rates now by using our FREE tool above!

The Business of Insuring Drivers

It is important to remember that, at its core, an insurance company is a business. It is a business that needs to make and not lose money; a business with a plan and a business model. This is why insurance companies hire underwriters. Underwriters use several different factors and formulas to determine what kind of a risk you pose to the insurance company.

The bigger the risk you are, the higher your car insurance premium; if you are a large enough risk, the underwriter may flat out refuse to insure you.

It is not good business sense for the car insurance company to insure drivers who appear to be at-risk for making multiple or serious claims that will cost the company thousands or even millions of dollars. At the end of the day, insurance companies are in the business to make money and they must make their bottom line the top priority.

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Is Auto Insurance a Requirement?

In nearly all states in the USA, auto insurance is mandatory for all drivers. Not having auto insurance can lead to serious penalties up to and including:

  • Suspension of your driver’s license
  • Suspension of car registration
  • Fines and penalties
  • Higher insurance premiums
  • Jail time
  • Community service

Auto insurance financially protects all drivers on the road in the event of an accident. This is why so many states have made auto insurance a legal requirement.

What Determines My Car Insurance Premium?

Car insurance companies use many different pieces of risk criteria to determine your insurability and the price of your auto insurance premiums. In general, the following information is used:

  • Age, Gender, and Marital Status: Drivers under 25 years of age and male drivers, especially those who are unmarried are considered to be higher risk and will generally pay higher premiums than drivers who are older, married, or female.
  • Driving Record: This factor is a big one. It goes without saying that driver’s who have a driving record with many moving violations are more of a risk and will see higher premiums. If you want to pay lower premiums, drive carefully and obey all rules of the road.
  • Credit History and Score: Although it comes as a surprise to many, your auto insurance company can legally, in most states, examine your credit history and score as a part of its underwriting process. Studies show that drivers with poor credit history are much likely to file insurance claims and are more of a risk to insure.
  • Zip Code: Where you live also has an impact on your care insurance rates. Certain areas of the country see more auto accidents, more auto-related lawsuits, and more car thefts and vandalism.If you live in one of these areas you can expect to pay a higher premium as you represent a greater risk to your auto insurance company.
  • Your Profession: Some professionals will see lower premiums such as firefighters, nurses, and police officers. Whereas, other professions, like delivery drivers can expect to pay more for their car insurance.
  • Car Type and Age: The type of car you drive and its age can also have a large impact on your premium. In general, newer and more expensive cars will have a higher insurance price tag. Cars with safety features and devices will have a lower insurance price tag.
  • How Far You Drive Your Car: The amount of miles you drive to work each day and your annual mileage can also increase or decrease your auto insurance premium.

Does a Criminal Conviction Affect My Car Insurance?

The answer to this question depends on several factors. Some car insurance companies will flat out refuse to insure a driver who has had a criminal conviction and some will even go as far as to refuse insurance products to anyone who has a household member who has been convicted of a crime.

Depending on the conviction, you may be able to keep your insurance with the same company but will see a rate increase when it comes time to renew your policy.

If you have a criminal conviction, you should check with your insurance company or potential insurance company to find out how it will affect your policy.

Although it can be tempting to lie or to omit this type of information based on fear, honest is really the best policy. An auto insurance company can cancel your policy within the first 60 days without giving a reason and drivers lying on their application is one reason for this law.

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SR 22 Insurance and Driving Convictions

If your criminal conviction deals with a moving violation, such as a DUI or driving without a valid license or insurance, you will likely be able to get car insurance but it will need to be a specific kind of auto insurance known as SR 22 insurance. This type of insurance is usually more expensive and certain auto insurance companies specialize in this type of coverage.

With SR 22 insurance, the auto insurance company will notify your state regarding your coverage, when it is active, and if and when it is canceled.

Drivers should understand that there are several criteria that determine their auto insurance premiums. If they have a criminal conviction, they should be honest with their auto insurance company and should anticipate paying a higher premium. If you need help lowering your auto insurance premium, try using ann online price comparison calculator. These types of tools make finding a competitive car insurance quote quick and easy. Enter your zip code in our FREE tool below to compare car insurance rates instantly!