Insurance premium increase calculator: annual cost and percent

Questions covered in this guide

How do you calculate an insurance premium increase?

Put the old and new premiums on the same time basis. Annual premium equals the stated premium multiplied by 12 and divided by the number of months it covers. Subtract old annual cost from new annual cost to find the dollar change. Divide that change by the old annual cost and multiply by 100 to find the percentage change. If the old premium is zero, the percentage is undefined.

Worked example: six months versus twelve months

Invented premiums: the old policy costs $900 for six months and the new quote is $1,980 for twelve months. Old annualized cost is $900 × 12 ÷ 6 = $1,800. The new quote is $180 more per year, or a 10% increase, averaging $15 more per month. Comparing $900 directly with $1,980 would overstate the change. The monthly average is not necessarily your actual installment payment.

Does annualizing a six-month quote guarantee the next renewal price?

No. Doubling a six-month premium makes the current quote comparable over a common period; it does not guarantee that a second six-month term will have the same premium. Keep the quote date and policy period with the result. A twelve-month projection built from a shorter term is an arithmetic comparison, not an insurer’s promise about a future renewal.

What if coverage or payment terms changed?

Record the differences before calling the result a like-for-like rate increase:

Insured drivers, vehicles, property or usage.
Coverage limits, deductibles and settlement terms.
Endorsements, exclusions and discounts.
Fees, down payments and installment arrangements.

Use consistently defined premium totals. The calculator does not automatically add omitted fees or disentangle a changed deductible from a changed price.

Can this explain why your insurance went up?

It measures the change in the numbers you supplied, not its cause. NAIC’s auto insurance overview describes rating and underwriting factors, but that list cannot diagnose your individual renewal. Ask the insurer to identify the changed inputs and pricing terms. A larger bill does not, by itself, establish which factor caused the increase.

How do you use the result when shopping?

Keep the annual dollar difference alongside the coverage differences in the policy comparison tool. Use the auto quote checklist to request comparable terms. If a lower quote changes the deductible, examine that tradeoff with the deductible calculator instead of treating the premium reduction as the entire outcome.

Putting it into practice

Converting both policy totals to the same annual basis prevents a shorter term from looking automatically cheaper. The result measures supplied price changes, while changed coverage and fees remain separate comparison questions.

Sources and supported claims

TDI recommends comparing coverage, deductibles and payment terms when shopping. The calculator annualizes the supplied premiums; it does not establish why a renewal changed.
Source ↗ · state · Checked 2026-10-12

NAIC identifies underwriting, coverage and vehicle details as factors in auto premiums; a numeric premium comparison does not identify the cause of an individual increase.
Source ↗ · national · Checked 2026-10-13

More help with this decision

Sources & scope

NAIC: Auto insurance coverage ↗
National education; policy and state requirements vary · Checked 2026-10-12

NAIC: Homeowners insurance consumer guide ↗
General coverage, exclusions, deductibles; policy wording controls · Checked 2026-10-12