Determining Auto Insurance Rates

It can be a hassle shopping for car insurance. It's hard to know who to trust and be confident you have the coverage you need—let alone at a good price. After all, you want a fair rate that is catered to you, right? GEICO likes to be transparent. You should know how we determine auto insurance rates.

How are car insurance rates determined?

Car insurance rates rely on the law of large numbers—a large collective group of policyholders shares the losses of a few policyholders. Within this large pool of people, insurers like GEICO are in a position to spot patterns and establish the probability of losses, such as accidents or claims. These patterns are what have an effect on your monthly premium.

For more information, read our auto insurance fundamentals.

How does GEICO determine an accurate car insurance rate for you?

GEICO auto insurance rates are analyzed by GEICO actuaries, who assess potential risks from statistical data. A multitude of characteristics have been proven to accurately determine the odds that someone will have an accident. Insurance rates are then determined based on an individual's combination of high and low risk factors. You pay according to your risk of loss: higher risk = higher premium.

What factors affect auto insurance rates?

Actuaries aim to determine the most accurate and fair car insurance premiums. Some influences include:

  • Driving experience
  • Driving record
  • Vehicle's safety features
  • Location

Don't worry—your car insurance rate isn't static.

Not only is being a safe driver important for obvious reasons, but it enables you to have a lower premium. Know that through the many changes of your life, your rates may change. GEICO wants to reward you with cheap car insurance for your improved driving record, your car's safety features, and other safe behaviors on the road. Get a free car insurance quote or view your policy regularly to see how much you could save.