Insurance rates are based upon the company's underlying costs, which include the number of claims and the severity of those claims. New York State is divided into many distinct rating territories filed by individual insurers to reflect differences in claim costs in those territories and other considerations. Traffic patterns, population demographics, and the cost of goods and services contribute to insured cost variations. For example, if Town A's loss experience is more severe than that of Town B, then auto premiums in Town A will be higher than those of Town B.