Your auto insurance premium is calculated based on the risk you pose to the insurance company. When you apply for auto insurance, an underwriter will calculate that risk and translate it into the cost of your auto insurance.

Value of Policy

Your policy limits set the maximum amount of money that the insurance company must pay out per claim. Most states have minimum requirements, but you may want additional protection, which will raise your costs.

Car Use

Insurance companies look not only at the number of miles you drive, but also the type of driving you do. Driving to and from work will result in higher rates than pleasure driving because commuting to work usually requires more traffic, which results in higher accidents.

Car Specs

The type of car you drive, such as a sports car vs. a minivan, will affect your insurance rate because some are more prone to accidents. The more safety and anti-theft devices you have, the lower your rate will be because they can lower the risk of bodily injury and theft.

Personal Characteristics

Your age, gender and marital status have a significant effect on your rates. If you are part of a statistically lower-risk group, like middle-aged married women, your rates will be lower.

Location

Where you live will affect your rates because different regions have higher accident rates and crime rates.

Credit Score

Some auto insurance companies will take into consideration your credit score. The higher your credit score, the lower your rates.

Source:

allinsuranceinfo.org: Factors Affecting Auto Insurance Rates

Car Insurance Rates.com: Factors that Affect Your Car Insurance Rates

Car Insurance Rates.com: Car Insurance Coverage Definitions

Resource:

Insurelane.com: What is Underwriting?