Although you hope you never have to use it, car insurance is one of the legal requirements of car ownership in most states, and it’s a cost that will affect your budget.
The amount you’ll pay is highly dependent on a number of variables, including your age, driving record, geographic location, and credit score. Fortunately, it’s easier than ever to get competitive car insurance quotes online.
And if you’re l wondering how much you should be paying, use the average car insurance costs guide below to inform your decision.
Average car insurance cost by state
The average car insurance cost varies widely depending on not just the state you live in, but also your zip code. Auto insurance is legally required in every state but New Hampshire, but each state also has its own minimum requirements for amounts of types of coverage. These factors alone will affect your car insurance rates without even considering your personal situation, such as age and driving record.
Because every state’s laws and regulations are different, and because each state has different rates of car accidents, thefts, and illegally uninsured drivers on the road, among other factors, you may find yourself paying more (or less) than someone in the same driving demographic as you who lives in a different state. For example, a married person who lives in Maine will pay up to $1,800 more than a single person who lives in Louisiana, based on the factors listed above.
You may also be required to carry different types of car insurance than someone in another state. For example, depending on where you live, you may be legally required to have collision or comprehensive insurance coverage, whereas someone in another state may only be required to carry liability insurance.
Least expensive average car insurance cost by state: If you’re fortunate to live in one of the following states, you’re probably paying less for car insurance than someone similar to you in another state. The least expensive average car insurance costs (annually) are found in:
- Maine: $372 (minimum coverage) to $963 (full coverage)
- Ohio: $351 to $989
- Idaho: $320 to $998
- Hawaii: $326 to $1,049
- Massachusetts: $431 to $1,100
Most expensive average car insurance cost by state: Where you live can have a profound impact on your average car insurance costs. Some of the most expensive states for car insurance are:
- Louisiana: $895 (minimum coverage) to $2,762 (full coverage)
- Michigan: $873 to $2,387
- Kentucky: $790 to $2,363
- Florida: $685 to $2,321
- Nevada: $839 to $2,161
Average car insurance costs by company
When choosing which insurance company to go with, remember that each insurer offers different rates based upon certain internal metrics, which may include your age, past driving history, claim history, credit score, and other factors.
The rates that an auto insurance company can offer may also be affected by the size and scope of their operations. Some common types of insurers are:
- Nationwide insurance companies that operate in all or most states
- Local insurance companies that operate in one or two states
- Regional insurance companies that operate in a geographic region, such as the Northeast or Mid-Atlantic
- High-risk insurance companies that focus on providing insurance for customers with poor driving records
Despite brand awareness, loyalty, and the consumer perception of a company, the big national insurance companies aren’t necessarily better than the others. It really comes down to your specific circumstances and needs. Researching average car insurance costs, getting quotes, and analyzing customer reviews are essential to keeping your average auto insurance costs down while maximizing coverage. Some companies will also bundle your car and home insurance together to provide you with greater savings.
Best car insurance rates by company: Among the big-name car insurance companies, here are some of the best rates you’ll find for average car insurance cost:
- Auto-Owners: $378 (minimum coverage) to $1,277 (full coverage)
- Geico: $380 to $1,268
- Farmers: $477 to $1,830
- State Farm: $489 to $1,491
- American National: $495 to $1,432
- Travelers: $526 to $1,464
- Progressive: $550 to $1,562
- Amica: $615 to $1,447
- Allstate: $656 to $2,381
- USAA: $759 to $1,169 (only available to veterans, active military members, and their families)
- Shelter: $771 to $1,718
As noted, insurance rates will vary greatly depending on a number of factors, including where you live.
Average cost of car insurance by coverage type
The average cost of car insurance also varies based on the type of coverage you choose (or are legally required to carry either by your state or lender). Comprehensive insurance, collision insurance, and liability insurance are the three most common types of auto insurance that you’ll encounter while you’re shopping.
Average cost of liability car insurance: Liability car insurance pays for the other driver’s medical bills and property damage if you’re at fault in an accident. Nationally, the average cost of liability car insurance is $611.12 annually.
Average cost of comprehensive car insurance: Comprehensive car insurance is a type of insurance that pays for damage to your vehicle. If you finance a car, your lender may require you to have comprehensive insurance to protect their investment.The average cost of comprehensive car insurance is $159.72 per year.
Average cost of collision car insurance: Because comprehensive car insurance doesn’t cover damage associated with a collision, regardless of who’s at fault, many drivers choose to add collision insurance to their policy. This type of insurance covers any collisions or accidents, whether caused by you or another motorist. The average cost of collision car insurance is $363.08.
Average cost of full coverage car insurance: Full coverage car insurance protects you against any foreseeable scenario when you’re behind the wheel, combining liability, comprehensive, and collision. Annually, the average cost of full coverage car insurance is $1,133.92.
Factors that determine the cost of your car insurance
Numerous factors determine the average car insurance cost no matter what type of coverage you want.
Driving record: Your driving record plays a pivotal role in determining your car insurance costs. If you have a clean driving record, that can translate into substantial savings. However, blemishes on your driving record signal to car insurance companies that you’re a higher risk. As a result, they are going to charge you higher premiums for auto insurance. Speeding tickets, car accidents, DUIs, and other moving violations all contribute to a poor driving record.
Types of coverage:The more types of car insurance coverage you require (e.g., anything beyond your state’s minimum requirements and coverage amounts) will naturally increase your car insurance costs.
Age: How old you are is another factor that impacts car insurance costs. In general, teenagers and drivers 80 and older will pay the highest rates. You’ll begin to see reduced costs when you turn 25 and again at 30. After that, expect a 5% to 10% reduction in car insurance costs for every decade until you hit 80.
Gender: Surprisingly, gender is one of the biggest determinants in average car insurance costs. Men can expect to pay more for car insurance from the time they start driving until they hit 40. After that, the trend reverses and women tend to pay higher premiums.
Marital status: If you’re married, expect to pay a bit less for car insurance than your single friends. ar insurance companies view married individuals as safer drivers with more financial stability, and thus, a lower overall risk.
Where you live: Where you live has a drastic effect on the average cost of car insurance. Auto insurance companies determine your perceived risk based on the number of uninsured and underinsured drivers, as well as the number of court cases or settlements made as a result of auto accidents in your area.
How often or how far you drive: If you drive infrequently or have a short commute, you’ll probably enjoy lower car insurance rates. Because you’re not on the road for long distances, you have less of a risk of being involved in an accident.
Credit history and insurance score: According to the Insurance Information Institute, drivers with poor credit file more claims than those with good or excellent credit. The link between more claims and poor credit is widely accepted as a determinant of risk by auto insurance companies.
Deductible amount: The higher your deductible, the lower your annual car insurance premium will be. This is a great way to lower the cost of your car insurance, but only if you can actually afford the cost of your higher deductible should you need to file a claim.
How filing a claim affects the cost of car insurance
Filing a claim almost always affects your car insurance cost. When you file a claim, car insurance companies view you as a higher risk. Then, they raise your car insurance rates as a hedge against this increased risk.Statistics show that any claim will increase the average cost of car insurance from 3% to 32% over the next three to five years. In other words, make sure that the claim is worth the hassle and sunken costs of car insurance premiums in the future.
If you’re an accident-prone driver, you may want to check with prospective car insurance companies to see if they offer accident protection. In some instances, this addition to your car insurance policy ensures that your rates won’t go up for a claim if you’re in an accident.
Most common types of car insurance discounts
Even if you’re a relatively safe driver, you can still save even more on your average car insurance costs by taking advantage of discounts offered by auto insurers.
Military discounts: Some insurance companies will offer discounts to active military members and veterans. This isn’t only to show appreciation, but also because military members tend to pose less risk than other drivers.
Safe driver discounts: Another way to lower your average car insurance costs is by completing an eligible safety course every few years. By doing so, your insurer deems you a more responsible driver, lowering your risk and premium in the process.
Good student discounts: If you’re a student under the age of 25, many auto insurance companies will offer what’s called a good student discount. This means that if you maintain a B-average or better, you’ll get a small discount off your insurance premium.
Ways to lower your car insurance costs
Drivers who check all the boxes for better car insurance rates don’t have to be satisfied with a “good enough” rate. A great driving record, good credit, and other factors may give you low average car insurance costs, but you can save even more by following a few tips.
Bundle your home and car insurance: If you have numerous cars or you need home insurance, you can often get a discount for bundling multiple insurance policies. Make sure to inquire with your car insurance provider to see if it offers such a discount.
Keep a claim-free record: Filing a claim costs you money in terms of both your deductible and a potential increase to your insurance premiums. If you’re able to keep a claim-free record, you’ll often see a sizable reduction to your monthly auto insurance premiums.
Paying in full: Auto insurance companies typically give you the option of paying your premium by the month, biannually, or annually. The good news is that biannual or annual payments can give you about a 5% discount on your average car insurance costs.Keep in mind that you shouldn’t pay your annual premium up front if doing so will put you in a tough financial position, but if you can afford to make the sizable payment in advance, you will save money overall.
Frequently asked questions
How much should you pay for car insurance?
There is no one best low price for car insurance because so many different factors go into the cost. The average car insurance premium per year is $611 for the minimum liability car insurance. However, the type of coverage you need, your driving record, and where you live will be the biggest factors in how much you’ll pay either above or below the average cost of auto insurance.
**How much should you pay for full coverage car insurance?
The average cost in the U.S. for full coverage car insurance is $1,134. Depending on where you live, how well you drive, how old you are, and a number of other factors, your cost for full coverage car insurance could be less, or it could balloon even higher. In some states, the average cost is $2,400. Budget accordingly.
What determines How much you pay for car insurance?
In addition to where you live, your driving record, and your type of coverage, auto insurance companies use a few other metrics to determine your car insurance costs. This includes age, gender, credit history, deductible amount, marital status, and how often or how far you drive.
At what age is car insurance cheapest?
For both men and women, car insurance is usually at its cheapest when you are around the age of 60. At this age, you are considered to be less prone to risky driving. You are also likely to drive less and are perceived to be more financially stable. How much does your car insurance go down when you turn 25?
Generally speaking, the car insurance rate for males drops by about 20% when they reach 25. The decrease is smaller for females (around 12% to 15%), but keep in mind that most females have a lower rate prior to turning 25 already.
How to search for car insurance quotes online
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