What Factors Contribute To High Car Insurance Premiums? 
When you consider insurance as shared risk pool , the answer to this question comes into sharper focus . If there are two drivers in the same city with the same driving record driving automobiles that are both the same year make and model , who should pay more for their policy , the driver who will commute 30 miles day to work or the one who uses the car sparingly on weekends ? Mileage makes a difference . Every mile is a unit of exposure that makes one riskier than another . If one of our drivers trades in their sedan for a high powered , low weight sports car and the other driver is still driving the low powered four door sedan he had in the first example , who should pay more ? Assuming the same mileage , the high powered sports car presents two problems to the shared risk pool . The first problem is that with that power and low weight the driver is more apt to engage in aggressive and perhaps dangerous driving . The second is that the body of that low weight sports car is probably more expensive to repair . The anticipated use of the vehicle and the cost of repair are two items which shift the expense that the risk pool will experience . Now suppose that the first driver , the one with the sedan is 16 years old while the driver of the high powered sports car is 55 . Experience plays a major role and might reverse the experience making the sedan the riskier car to insure . Experience is very important in rating an automobile risk . Now suppose that this first driver also has a recent citation for driving under the influence of alcohol . The older driver has a spotless driving record . Certain violations are deemed more dangerous than others and a DUI is considered the worst . This blemish will follow this young driver for ten years in California and the price of insuring that driver will increase a great deal . DUI , and racing are two violations that have a tremendous impact on the cost that the risk presents . Now suppose that our older , more stable driver takes a job delivering pizzas for a neighborhood pizzeria . The driver now presents an entirely different type of risk because he is now doing commercial driving . The risk he presents is increased a great deal because he will not be as focused on driving as he will be looking for addresses and worrying that the pizzas might be getting cold . As you can see most drivers are unwilling to pay the same amount for insurance that a driver that is inexperienced , or driving an expensive fast car , or driving excessively , or using the car for commercial purposes or has a record of DUI . They want to share the expense of insurance with like drivers and that is exactly how the insurance company operates . The insurance company issues rates for standard drivers and then alters the rates to take into account the variations that exist . These rates and variations are based upon the companies experience with thousands of accidents . The assignment of rates is not a perfect science but it is as close as possible to reality . The amount an insurer charges for a risk is what they think it will cost them to include that car into their risk pool . Insurance companies are not designed to gouge the public . They are required by law to remain solvent so that they can pay claims and meet their promises . The price an individual driver pays needs to be considered from the perspective of all the other drivers who the company insures . 