Knowing how auto insurance is priced will help you save money. You may not realize all the factors that car insurance companies consider. Let's look at how car insurance rates are set and find ways you can save. 1. Keep a clean driving record: Causing a car accident is one of the biggest reasons for high rates. Auto insurance companies typically add a surcharge at renewal time after you cause an accident. A surcharge is an increase for a specific period of time. If you have a surcharge, ask your agent when it ends. 2. Maintain good credit: Many insurance companies take your credit (sometimes referred to as a credit-based insurance score) into account when they calculate your auto insurance premium. Insurance companies have found that having poor credit correlates to making more claims. (Not all states allow the practice.) 3. Don't let a policy lapse: If you let your auto insurance policy lapse -- meaning expire without canceling it -- expect higher rates when you go to buy another policy. If you don't maintain continuous coverage, you're seen as a risky customer. 4. Consider supplemental coverage options: In addition to the liability protection required by your state, there is a wide range of optional car insurance coverage that drivers should at least consider. You can get comprehensive coverage for multiple kinds of car damage: vandalism, theft, flooding, hail, or wildlife on the road.