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What are the most important factors in determining car insurance costs in Billings?

Here's what you need to know...
  • The Billings Division of Insurance is responsible for regulating the insurance industry, approving auto insurance rates, and investigating consumer complaints
  • Every carrier that’s licensed to sell insurance in Billings must set their own rates
  • When a company is rate-making the gross premium, a client’s auto insurance costs will be dependent on the company’s base rate, the driver’s risk level, and their likelihood of filing a claim
  • Insurers use several different rating factors to put you into a risk group
  • One way to reduce your premiums for coverage in Montana is to take advantage of the many existing discounts

Like many towns through the country, Billings, Montana, started as a railroad town that was home to only a train station, a single house, and a store. After just 30 days, hundreds of stores and home were built and the territory was nicknamed “The Magic City.”

Over a century later, Billings is home to 104,374 residents and 178,248 registered vehicles.

As a resident and vehicle owner in Billings, it’s your legal responsibility to comply with Montana’s mandatory auto insurance laws. While buying insurance is a must, you do have choices in the marketplace. It can be helpful to learn what factors can have an effect on the cost of your insurance while you’re shopping the market.

Start comparison shopping today using our FREE online tool. Enter your ZIP code above to get started!

 What Auto Insurance Is For

People buy auto insurance to safeguard themselves.

When you build yourself a personal car insurance policy, your gross premiums are dependent on the different types of coverage that you buy.

Some of the first-party and third-party coverage options that you can select to protect you include:

  • Liability
  • Comprehensive
  • Collision
  • Medical Payments
  • Underinsured/Uninsured Motorist

Understanding How The Insurance Industry Works

Insurance companies are free to make their own rates. Even though rate making is the carrier’s job, the industry is still monitored by government agencies that are appointed to regulate the industry and protect consumers.

In the state of Montana, it’s the Commissioner of Securities and Insurance who is responsible for regulation and policing.

Insurers in Billings must be licensed to sell property insurance in Montana before they can start marketing their products.

Once the insurer is licensed by the commissioner, the carrier must spend time projecting claims, deciding which segment of the market to target, and calculating base rates.

A lot goes into calculating rates. The company’s goal is to keep rates fair while still collecting enough to pay out claims, cover operational expenses, and stay profitable. Once actuaries have assessed costs, the insurer’s rate will be filed for approval.

Insurance Regulation


The Billings Division of Insurance may be one of the smallest state government agencies, but it plays a big role in the industry as the watchdog that protects auto insurance consumers all throughout Montana.

The agency is responsible for monitoring operations in the industry to ensure that insurers are always financially responsible and that consumers are buying fair-priced and legitimate insurance products.

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Average Auto Insurance Cost in Billings

In the United States, the average consumer pays around $1669 per year for auto insurance coverage. Luckily, some states have lower average premiums and Montana is one of these states.

On average, a driver in the state of Montana will pay around $1131 per year for coverage. You can narrow the statistics, even more, to find that residents in Billings pay an average of $1106 per year.

Average premiums can act as a good guide for you when you’re trying to shop the market for coverage from a standard insurer. When you’re comparing national, state, and citywide averages, you need to take a look at what coverage options are being quoted. Most averages are for basic quotes.

Consumers who buy full coverage in Montana pay around $454 more per year.

Driver Risk Classes and How They Affect Rates

Don’t let the averages fool you. You could pay hundreds of dollars less than some drivers and hundreds of dollars more than others. What you pay and the type of policy that you’re eligible for is dependent on your risk class.

Insurance companies assign drivers to risk classes in an effort to predict how likely someone is to have an accident.

There are three different classes that are used in the standard industries. Some carriers offer insurance in each group and others focus on just one segment of the market.

Here are the different risk classes:

  • Preferred Risk – Individuals in the preferred risk class pay the lowest rates because they have clean driving record, little to no not-at-fault claims, a good credit score, and an established auto insurance history
  • Standard Risk – Standard risk drivers fall in the middle. They may have a minor violation, an at-fault accident, or multiple non-fault accidents
  • High Risk – Drivers who fall into the high-risk class pay the highest rates because they have major violations, no driving experience, several claims, poor credit, and lapses in their insurance

Factors That Can Affect Your Rates

Once you’re assigned to a risk class, the insurance carrier that you choose will review your personal information to calculate your rate. Everything that’s considered affects claims tendencies.

Here are common rating factors used in Billings:

  • Age – Inexperienced drivers are higher risks than more experienced drivers
  • Gender – Males are higher risks than females in most age groups
  • Insurance Score – If you have a low credit-based insurance score, you’re more likely to file a claim
  • Vehicle – Vehicle size, body style, cost to repair, and claims rate will all be considered
  • Vehicle Use – Pleasure drivers pay less than commuters or business users
  • Annual Mileage – The less you drive the less you’ll pay for your mileage rating
  • Driving Record – convictions will raise rates and make you ineligible for discounts
  • Claims History – at-fault claims can be surcharged for up to 3 years
  • Location – If you live in a Billings zip code with a higher property crime rate, you’ll pay higher premiums

How to Reduce Your Auto Insurance Premiums

You can’t control the rates charged by Billings insurance companies but you can be proactive so that you can find low premiums. It’s always recommended to comparison shop before you buy.

As you’re comparison shopping, take advantage for any discount you’re eligible for.

Here are some of the most common discounts offered to policyholders:

  • Good Driver
  • Good Student
  • Multi-line
  • Anti-theft
  • Multi-car
  • Driver Education
  • Full Payment
  • Low Mileage

Always comparison shop to find low-priced auto insurance in Billings. Start by entering your ZIP code into the quote comparison tool below!

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