Why Is Car Insurance So Expensive?
Find out if you’re getting ripped off on your car insurance in less than two minutes.
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Several factors can contribute to making your car insurance expensive, including your age, your chosen coverage, driving record, credit rating and where you live.
But just because car insurance can be pricey doesn’t mean that you can’t find a good deal. With a car insurance comparison app like Jerry, you can quickly sign up, compare car insurance quotes, and purchase the policy that works best for you.
The average Jerry user saves $879 per year! So again, who says car insurance needs to be expensive?
What factors make car insurance so expensive?
No one denies it—car insurance can be expensive. Here’s a breakdown of the most common factors that drive insurance premiums up.
You’re a young driver
Do young people get the shaft? Unfortunately, when it comes to car insurance, it can feel that way.
The hard truth is that younger drivers are inherently riskier to insure. They are 4.5 times more likely to get into an accident than more experienced drivers. This is a major factor in why insuring young people can be so expensive.
Costly insurance coverage options
When you are looking for car insurance, the more options you add, the more your coverage will cost.
A full suite of coverage, including collision and comprehensive coverage to go along with liability coverage, can cost nearly 70% more than a only carrying liability coverage.
Collision insurance pays for repairs to your vehicle if it is damaged in an accident with another vehicle. Comprehensive insurance covers damage resulting from an accident that doesn’t involve another car. Both options are good to have, but they’ll significantly increase your premiums.
Your driving record
Drivers with recent accidents or traffic violations on their record will be significantly harder to insure.
Insurers assessing your record may deem you likelier than other drivers to get into an accident or cause traffic violations. And so long as you’re deemed a risky driver, your premiums will rise.
Having a serious offense like a DUI on your record will make it even harder to keep your insurance premiums low. Some insurers require drivers with a DUI to file for SR-22 insurance, which will increase your costs even more.
SR-22 is a form filed along with your insurance attesting that you meet your state’s minimum liability requirements.
Unfortunately, your car insurance rates may go up simply due to the zip code you live in. If there is a history of costly car insurance claims from your area, your insurer will take this into account when calculating your rate.
Insurers may make the assumption—rightfully or not—that drivers in your area will file expensive claims, and hike premiums accordingly.
In some states, your credit rating may affect how much you pay for car insurance. If you have poor or no credit, you may be charged more for insurance.
Generally speaking, insurance companies tend to assume that drivers with poor credit are at higher risk to file a claim.
Keep in mind that California, Hawaii, and Massachusetts have outlawed using credit rating to set insurance rates. If you live in one of these three states, you won’t have to worry about a poor credit rating affecting your car insurance premiums.
Key Takeaway Many factors can contribute to high insurance rates, including age, choosing costly coverage options, having a poor driving record or bad credit, and living in a higher-risk zip code.
How to lower car insurance
Now that you know what factors make car insurance so expensive, let’s look at how you can find savings.
Compare quotes from different providers
Always compare insurance quotes because they can vary wildly between insurers.
While most insurance companies consider similar factors when setting their premiums, they all weigh those factors differently. This means that the same driver and coverage could end up with a huge range of quotes from different insurers.
For this reason, shopping around to compare multiple quotes is your best bet to find cheap car insurance. But don’t waste time filling out long forms and making calls—use Jerry)!
Jerry is the web’s top car insurance broker and comparison shopping app. Jerry generates competitive quotes from the nation’s top insurers in order to find the best and cheapest car insurance for you. No forms, phone calls, no hassles!
“This is the real deal. The app is super easy and intuitive to use. Best part, I’ll be saving ~$75/month!!! No joke. This app did all the work for me in like 5 minutes or less. After that, I just logged onto the app and paying for the policy took two seconds. Plus, they’re cancelling my old policy for me. So. Easy. No they didn’t pay me to write this review; I’m just genuinely happy to be saving almost $1000/year. That’s a pay raise yo!” — Satisfied Jerry user
Here’s how much drivers have saved simply by comparing rates and switching with Jerry.
|Age||Cost after Jerry||Cost before Jerry||Avg annual savings|
Full coverage insurance
|Cost after Jerry||Cost before Jerry||Avg annual savings|
Bad driving records
|Cost after Jery||Cost before Jerry||Avg annual savings|
Look for discounts
When you’re shopping for car insurance, always look out for discounts. Most insurers will offer discounts if policyholders can meet certain criteria.
Here are some of the most common discounts that can help lower your annual premium.
|Discount type||How to get it||Potential annual savings|
|Defensive driving||Complete a defensive driving course||10% to 15%|
|Vehicle anti-theft||Install an anti-theft device in your car, such as a GPS tracker||10% to 15%|
|Good student||Full time student with a good GPA (3.0 or higher)||10% to 15%|
|Occupation||Join a professional organization||10% to 15%|
Add young drivers to a parent’s policy
Young drivers have some of the highest rates in the country, due in part to the increased likelihood of accidents and risky driving behaviors.
If buying insurance is simply too expensive for a young driver, being added to a parent’s policy can be a good way to save significantly on insurance costs.
Key Takeaway Comparing quotes from multiple insurers, asking about potential discounts, and adding young drivers to a parent’s policy are all ways to help lower insurance premiums.