The premium of insurance in many occasion decide by the government or by the insurance companies, which work on the basis of a broad poly formulated by the government. It has been seen that the insurance companies have ample of freedom to set and fix the price of damage covering. If the insurance company decides the premium rate, then it is done on the basis of a complicated calculation. The premium does not depend upon single factor. Therefore, the premium varies from company to company and situation to situation. The factors includes the features and characteristics of car, the types of coverage, driver’s profile etc.

The gender of a driver is an important factor, which decides the premium. By survey it has been proved that men drives more than woman and man is more prone to accident; irrespective of age and profession. This is the reason; insurer keeps the surcharge rater lower for woman than man. Similarly, age is an important bearing on deciding premium. For example teenagers, those who have no driving experience need to pay higher premium than a teenagers who has driving record. In USA, many insurance companies gives discount to the teenagers, if they undertake driving training from a recognized driving institute. In US there are many insurance companies, which gives good amount discount to the students. The insurance companies followed a standard practice according to which young people around 25 are charged with lower premium and similarly retired people are given some discount. Some insurance companies partly give importance on the distance travel. If you have to buy any insurance policy for your car, you have to pay a premium. Therefore, you must know all those factors that determine the rate of premium.