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April 1, 2021 4:00 AM
Ashley Chorpenning - Forbes Advisor
Posted:
Updated:
April 1, 2021 10:55 AM
From a driver’s perspective, understanding how car insurance companies set prices can be puzzling. Auto insurance companies use multiple pricing factors to determine your risk, meaning how likely it will be that you’ll file a car insurance claim. The lower your perceived risk, the better your car insurance rates.
Not all insurance companies weigh pricing factors the same. A car insurance quote you get at one company might be significantly cheaper at a different company for the exact same coverage. Here’s the main factors in the pricing formulas.