Glossary

Rating factors

The characteristics insurers use to price a policy, such as driving record, location, vehicle, mileage and, where allowed, age and credit.

Also called: rating variables, pricing factors, rating factor

Rating factors are the facts about you, your car and your coverage that an insurer uses to adjust its base insurance rate up or down. Common ones are driving record and claims history, years of driving experience, age, annual mileage and use, where the car is garaged, the vehicle's make and model, the coverages and deductibles you choose and, where state law allows, a credit-based insurance score.

Each factor is typically a multiplier called a relativity, with 1.00 as average: 1.25 adds 25%, and 0.85 takes off 15%. Because they multiply, factors compound. Example: a $500 base rate × 1.20 for territory rating × 1.10 for the vehicle symbol × 0.90 for a clean record = $594 before discounts (hypothetical figures).

State law limits which factors are allowed. California's Proposition 103 makes driving record, annual mileage and years of experience the three mandatory factors, in that order of importance. Michigan bars rating on sex, marital status, home ownership, education, occupation, postal zone and credit score. Hawaii prohibits rating on age, sex, length of driving experience, credit and marital status, and Massachusetts bars the use of credit information. Within a state, insurers also weigh factors differently, which is why quotes for the same driver vary so much. See how car insurance rates are calculated.

Last reviewed October 4, 2026

In the index now

Related terms

Insurance rate The price per unit of coverage an insurer files with the state, which rating factors then adjust to produce your individual premium. Premium The amount you pay for an insurance policy over its term, built from the insurer's rate, your rating factors, coverage choices and discounts. Territory rating Pricing based on where a car is garaged, with each area assigned a factor that reflects its local claim costs. Vehicle symbol A code insurers assign to each make, model and trim to reflect its expected claim costs, used as a rating factor in pricing. Credit-based insurance score A score built from parts of your credit report to predict how likely you are to file insurance claims, used in pricing where state law allows. Underwriting The process an insurer uses to decide whether to accept an applicant, on what terms, and in which pricing tier or company.

Related guides

Affinity, employer and occupation discounts How employer, alumni, professional and military group discounts work, which insurers specialize by occupation, and how to tell if one really saves money. How insurers use AI in pricing and claims Where car insurers use AI, from pricing models to photo damage estimates, how state regulators are responding, and what to do if an algorithm affects you. California car insurance: costs, Prop 103 and the 2025 minimums How Proposition 103 shapes California car insurance prices, what the 30/60/15 minimums since 2025 mean, and where California ranks on cost. California Proposition 103 explained What California's 1988 Prop 103 did: the 20% rollback, prior approval of rates, the Good Driver Discount, ranked rating factors and paid consumer intervenors. Car insurance for seniors How age affects car insurance after 60, which discounts suit older drivers, and how to adjust coverage in retirement without leaving gaps. Getting car insurance with a foreign or new license How to insure a car with a foreign license or international driving permit, why you are priced as a new driver, and how to lower the cost.

Related tools

Renewal rate increase checker See how much your car insurance renewal went up per year and per month, separate your own changes from a rate increase, and get a list of next steps.