# Mathematical Applications to Calculate Car Insurance Premiums

Car insurance premiums are calculated based on the potential for loss to the insurer. The insurance company’s actuaries are charged with the responsibility of determining car insurance premium rates. The actuaries look at many factors to access risk and come up with the amount of premium you ultimately are required to pay. Some of the factors that go into calculating car insurance premiums include type of vehicle, zip code, location of where the car is parked, miles traveled on a daily basis, driving history (including speeding tickets and DUIs) and other factors.

#### Website and Online Car Insurance Premium Calculators

There are websites that offer a car insurance calculator as a way to estimate the premium cost. A word of caution is that any of these sites suggest that the calculation that is performed based on the information you provide is an estimate and not an actual quote. This is because any calculator of premium rates must be approved by the state insurance commission or department in order to prevent the dissemination of false or misleading information. There may be variations from the amounts offered by these calculators and the real amounts because of various factors, chief among them being local policies and hidden payments.

#### Using Averages

You may be able to rely on average rates for a region, local area or zip code in which you use a car. The information will give you a basic idea of the calculated car insurance premium rate. Remember that an average does not take into consider the highest or lowest car insurance costs for a given area. It also omits the type of insurance coverage that you are seeking. If you are looking for comprehensive coverage and receive information for the average car insurance premiums for liability-only policies, this information would not be very meaningful to you or useful. However, you do get a ballpark figure based on the information that you have provided.

#### See a Licensed Insurance Agent

Using an online calculator or other application for determining car insurance premiums may give you a general idea but the best way to calculate the car insurance premium cost for you is to see a licensed insurance agent. The insurance agent has access to the company’s illustration software and can provide you with the information specific to your situation as oppose to the online calculator. The insurance agent would also need to know specifics about your vehicle that you need insured. The figures given out by them will depend on the information you provide.

One of the benefits you get from visiting a licensed insurance agent—apart from the personal approach—is that you acquire the knowledge of different companies and different policies that you can compare. Car insurance is not etched in stone; premiums vary from company to company. The insurance agent will not just appraise you of these figures on premiums, but they will also probably give you insider’s information on which policy is the best. There are things like processing, payouts, etc. that the online calculators won’t tell you but an insurance agent could.