The price of all types of insurance is closely related to the expected cost of the risk.
By far, the largest percentage of auto insurance costs relate to the likelihood of being in a collision and paying out claims. Drivers with recent driving convictions, a history of at-fault claims or limited experience generally represent a higher risk than drivers with “clean” driving records and many years of driving experience. As a result, those drivers deemed to be a higher risk typically pay more.
Other costs include distribution, general operating expenses and premium taxes.