The 5 Most Costly Situations That Affect Car Insurance Premiums
While you can easily find the right car insurance to meet your needs, keeping your premiums down is sometimes more challenging. Even though you can’t control your age, gender, or previous accidents on your record, you can become more aware of the most costly premium-raising situations going forward.
The five most costly situations that cause your car insurance to go up are as follows.
Getting Involved in At-Fault Accidents
At-fault accidents represent one of the biggest factors that cause car insurance to go up. Worse yet, the more accidents there are on your record, the higher your premiums rise. Too many accidents can also cause a car insurance company to decide not to renew your policy.
Taking a defensive driving course represents a great way to reduce an insurance premium hike following an accident. Keep in mind that the laws governing such classes vary by state, with some restricting who can take advantage of such courses according to age. DMV.org provides a list of regulations for each state and who qualifies for a defensive driving course discount with their car insurance company.
Living in the Wrong Area
Your home address plays a part in determining your car insurance premiums. Drivers who live in areas that see greater instances of theft and vandalism pay more for car insurance compared to those who live in safer parts of a city or state. Also, high-traffic areas carry higher premiums since the likelihood of getting into an accident increases with the greater number of cars on the road.
The number of uninsured drivers in an area can also cause your car insurance to go up. The following chart shows the differences in car insurance premiums among the states.
| Annual Car Insurance Premium Averages By State | ||
|---|---|---|
| Rank | State | Premium |
| 1 | Michigan | $2,738 |
| 2 | Montana | $2,297 |
| 3 | New Jersey | $1,905 |
| 4 | Louisiana | $1,842 |
| 5 | Oklahoma | $1,778 |
| 6 | Washington, D.C. | $1,773 |
| 7 | California | $1,752 |
| 8 | Florida | $1,654 |
| 9 | Maryland | $1,610 |
| 10 | Rhode Island | $1,608 |
| 11 | Delaware | $1,607 |
| 12 | Georgia | $1,559 |
| 13 | Texas | $1,510 |
| 14 | West Virginia | $1,456 |
| 15 | Wyoming | $1,421 |
| 16 | Colorado | $1,393 |
| 17 | Connecticut | $1,367 |
| 18 | South Carolina | $1,353 |
| 19 | Arkansas | $1,345 |
| 20 | Alabama | $1,337 |
| 21 | Massachusetts | $1,325 |
| 22 | Pennsylvania | $1,305 |
| 23 | Kentucky | $1,295 |
| 24 | New Mexico | $1,277 |
| 25 | Mississippi | $1,277 |
| 26 | Oregon | $1,267 |
| 27 | Minnesota | $1,257 |
| 28 | Nevada | $1,221 |
| 29 | North Dakota | $1,188 |
| 30 | Nebraska | $1,188 |
| 31 | Arizona | $1,188 |
| 32 | South Dakota | $1,168 |
| 33 | Washington | $1,168 |
| 34 | Tennessee | $1,145 |
| 35 | Kansas | $1,135 |
| 36 | Indiana | $1,113 |
| 37 | Alaska | $1,078 |
| 38 | Utah | $1,061 |
| 39 | Missouri | $1,056 |
| 40 | New York | $1,050 |
| 41 | Hawaii | $1,049 |
| 42 | Illinois | $1,035 |
| 43 | Virginia | $1,020 |
| 44 | Iowa | $989 |
| 45 | North Carolina | $987 |
| 46 | Vermont | $942 |
| 47 | New Hampshire | $941 |
| 48 | Idaho | $935 |
| 49 | Wisconsin | $912 |
| 50 | Ohio | $900 |
| 51 | Maine | $808 |
| National Average | $1,325 | |
Adding a Teen to Your Car Insurance Policy
Adding a young driver aged 16 to 24 to your policy will likely cause your car insurance to go up. You must list any licensed driver in your home who does not have their own insurance on your policy. Not doing so can result in a denied claim or cancelled policy if they have an accident while driving your vehicle. The following table shows the average car insurance quote by age across the U.S.
| Average Car Premium Cost By Age Across the U.S. | |
|---|---|
| Age | Average Cost Per Year |
| 16 |
$8,226 |
| 18 | $6,456 |
| 21 | $3,620 |
| 25 | $2,374 |
| 30 | $2,078 |
| 35 | $2,028 |
| 40 | $1,973 |
| 45 | $1,929 |
| 50 | $1,855 |
| 55 | $1,845 |
| 60 | $1,867 |
| 65 | $1,956 |
| 70 | $2,131 |
Getting Better Insurance Coverage
Opting for higher coverage will drive your car insurance premiums up. Your deductible — which is the amount you must pay in the event of an accident before your car insurance kicks in — also plays a part in the final cost of your premium. The following table shows the minimum car insurance coverage requirements by state.
| Liability Coverage Requirements by State | |
|---|---|
| State | Body Injury Liability per Person / Bodily Injury Liability per Accident / Property Damage Coverage Requirements |
| Alabama | $25,000 / 50,000 / 25,000 |
| Alaska | $50,000 / 100,000 / 25,000 |
| Arizona | $15,000 / 30,000 / 10,000 |
| Arkansas | $25,000 / 50,000 / 25,000 |
| California | $15,000 / 30,000 / 5,000 |
| Colorado | $25,000 / 40,000 / 10,000 |
| Connecticut | $20,000 / 40,000 / 10,000 |
| Delaware | $15,000 / 30,000 / 10,000 |
| District of Columbia | $25,000 / 50,000 / 10,000 |
| Florida | $10,000 / 20,000 / 10,000 |
| Georgia | $25,000 / 50,000 / 25,000 |
| Hawaii | $20,000 / 40,000 / 10,000 |
| Idaho | $25,000 / 50,000 / 15,000 |
| Illinois | $20,000 / 40,000 / 15,000 |
| Indiana | $25,000 / 50,000 / 10,000 |
| Iowa | $20,000 / 40,000 / 15,000 |
| Kansas | $25,000 / 50,000 / 10,000 |
| Kentucky | $25,000 / 50,000 / 10,000 |
| Louisiana | $15,000 / 30,000 / 25,000 |
| Maine | $15,000 / 30,000 / 10,000 |
| Maryland | $30,000 / 60,000 / 15,000 |
| Massachusetts | $30,000 / 60,000 / 15,000 |
| Michigan | $20,000 / 40,000 / 10,000 |
| Minnesota | $20,000 / 40,000 / 10,000 |
| Mississippi | $25,000 / 50,000 / 25,000 |
| Missouri | $25,000 / 50,000 / 10,000 |
| Montana | $25,000 / 50,000 / 10,000 |
| Nebraska | $25,000 / 50,000 / 25,000 |
| Nevada | $15,000 / 30,000 / 5,000 |
| New Hampshire | $25,000 / 50,000 / 25,000 |
| New Jersey | $15,000 / 30,000 / 5,000 |
| New Mexico | $25,000 / 50,000 / 10,000 |
| New York | $25,000 / 50,000 / 10,000 |
| North Carolina | $30,000 / 60,000 / 25,000 |
| North Dakota | $25,000 / 50,000 / 25,000 |
| Ohio | $12,500 / 25,000 / 7,500 |
| Oklahoma | $25,000 / 50,000 / 25,000 |
| Oregon | $25,000 / 50,000 / 20,000 |
| Pennsylvania | $15,000 / 30,000 / 5,000 |
| Rhode Island | $25,000 / 50,000 / 25,000 |
| South Carolina | $25,000 / 50,000 / 25,000 |
| South Dakota | $25,000 / 50,000 / 25,000 |
| Tennessee | $25,000 / 50,000 / 15,000 |
| Texas | $30,000 / 60,000 / 25,000 |
| Utah | $25,000 / 65,000 / 15,000 |
| Vermont | $25,000 / 50,000 / 10,000 |
| Virginia | $25,000 / 50,000 / 20,000 |
| Washington | $25,000 / 50,000 / 10,000 |
| West Virginia | $25,000 / 50,000 / 25,000 |
| Wisconsin | $25,000 / 50,000 / 10,000 |
| Wyoming | $25,000 / 50,000 / 20,000 |
Getting Caught for Speeding and Other Traffic Violations
Getting tickets for speeding and other traffic violations can identify you as a risky driver. Minor violations can significantly raise your premiums, or at the very least cost you your good driver discount.
More harmful violations, such as a DUI, can cause your car insurance to go up by 100% or more. The following table, from Neckerman.com, shows how various moving violations negatively affect your car insurance premiums.
| Average Premium Increases for Moving Violations in the U.S. | |
|---|---|
| Moving Violation | Average Percent Increase |
| DUI/DWI | 92.49% |
| Reckless driving | 83.29% |
| Speeding 31 + MPH over the limit | 29.26% |
| Speeding 16 to 30 MPH over the limit | 28.06% |
| Careless driving | 26.62% |
| Driving the wrong way | 21.34% |
| Speeding 1 to 15 MPH over the limit | 20.54% |
| Improper passing | 20.30% |
| Following too close | 18.86% |
| Failure to stop | 18.94% |
| Not yielding to a pedestrian | 18.78% |
| Failure to yield | 18.71% |
| Not signaling | 18.55% |
| Violating railroad rules | 18.07% |
| Driving in the carpool lane | 17.91% |
| Driving without a license | 16.47% |
| Not wearing a seat belt | 5.60% |
Car insurance coverage requirements vary according to where you live, your driving record, your age, and other factors. Understanding what can affect your car insurance premiums allows you to make decisions to keep your rates low. If you decide to seek more cost-effective insurance from another company, allow Jerry to help you find the best coverage.
