The average cost of car insurance varies widely depending on several factors, including where you live and which coverage options you select. To provide accurate national averages, WalletHub conducted a nationwide survey among major car insurers using an ideal driver profile that fulfilled requirements in all 50 states.
Some of the key factors are within your control, like age and gender. But the one most impactful element is likely your car choice.
How Much Should I Pay for Car Insurance?
Car insurance rates depend on several variables and your annual premium for full coverage may not be the same for all. Some factors to keep in mind include where you live, your driving history and the type of vehicle you own or lease. Gaining an idea of your costs ahead of time will allow you to better plan.
The average annual rate of car insurance can vary significantly by state and region, with areas experiencing greater risks from accidents or theft being more likely to have higher car insurance premiums than others. Other variables like labor and materials costs, road conditions and coverage levels also impacting prices of auto policies.
Location and ZIP code play an essential role in determining how much car insurance costs. Drivers in New York, Louisiana and Florida often pay the highest rates as these drivers present greater financial risk to insurers because they file more claims.
Your credit score also plays a part in determining the cost of car insurance; those with excellent scores tend to enjoy lower premiums compared to those with poorer ones; however, several states, including California, Hawaii, Massachusetts and Michigan have banned credit scores from being used as a factor when setting car insurance premiums.
Age and gender also impact the cost of car insurance policies, with men typically paying more than women on average; this disparity becomes smaller after age 25; furthermore, married drivers usually pay less than single or divorced drivers for coverage.
Other factors affecting car insurance pricing are annual mileage and whether or not your vehicle is considered safe or high risk. Drivers who commute more often, are considered higher-risk drivers, or own high risk vehicles will incur more insurance premiums; those in luxury cars or modified vehicles will pay even more for coverage.
Bundling car and homeowners/renters insurance together could save money. Furthermore, taking steps such as decreasing annual mileage or being a more careful driver could also lower car insurance premiums.
The Type of Car I Drive
Every driver has his or her own insurance history and experience; however, several common factors influence the cost of car insurance policies. Some examples include your type of vehicle you drive, age and gender considerations as well as whether there have been recent accidents or DUIs in your state. Furthermore, state minimum car coverage requirements as well as optional extras like new-car replacement and roadside assistance coverages all play an impactful part.
Car insurance costs can differ depending on the state and even city in which one lives due to risk of accidents, theft and other damage differing significantly depending on their risk profile. States with higher crime rates and traffic congestion tend to incur higher insurance costs than those with lower crime rates and congestion levels; your ZIP code also plays a factor as some insurers have noted more frequent accidents or robberies in certain areas than others.
Your credit score can have a substantial effect on the car insurance rates for which you qualify, depending on both the insurer and vehicle you drive. According to research by WalletHub, drivers with poor credit typically pay around 87% more for full coverage compared with drivers with good credit; this may be because people with bad credit file more claims and, the more claims filed means more money lost by insurers; however some states such as California, Hawaii, Massachusetts, Michigan, and Montana restrict or prohibit using credit scores when setting car insurance rates.
Consider also what kind of vehicle you drive, since some types are significantly more costly to insure than others. High-end cars such as luxury or sports cars tend to cost more due to their power and top speed; similarly, SUVs and vans pose greater risk in an accident situation due to being larger vehicles with greater potential damage or injury exposure for other drivers.
My Age and Gender
Gender has long been used as an influential factor when setting car insurance rates. Men tend to pay more because insurers view them as higher risks, such as the increased frequency of fatal crashes among male drivers. But its effect varies by state and insurance provider – some ban its use while others allow its influence but with restrictions or bans imposed.
Young drivers typically pay higher auto insurance premiums due to their inexperience behind the wheel and studies showing them as more prone to car accidents than other drivers. However, their rate increases generally diminish as they gain experience on the road and become older drivers themselves.
Insurance providers consider the average age of a driver’s vehicle when setting rates. Newer cars tend to cost more due to expensive features that need replacing or repairing, whereas driving an older model could save money by being less in good condition than newer models.
Gender plays an especially crucial role in determining car insurance premiums for teens and young drivers, with men paying more due to statistics mentioned earlier and the higher likelihood that men are involved in car accidents than women. By age 25, however, the gap in premiums begins to narrow considerably.
Bankrate used data from Quadrant Information Services to assess average car insurance rates by age and gender for minimum-coverage policies in each state. Our rates assume a 40-year-old male driver owning a 2016 Honda Accord EX, who commute five days each week and cover 12,000 miles annually.
My Driving Record
As part of their application for car insurance, all insurers conduct a driving record search. This search will reveal any blemishes on your record, such as traffic violations and accidents. Typically, more dings on your record mean higher premiums; however major violations such as DUI may disqualify you altogether from being insured.
Your vehicle’s make and model also has an effect on its insurance rates, such as high-end luxury models or those equipped with costly imported parts that will incur greater repair expenses compared to domestic models. Therefore, SUV drivers will pay more for full coverage.
Your state Department of Motor Vehicles may offer to provide you with a copy of your driving record for a fee, which contains information used by insurance companies to set rates – this document includes your driver’s license number, details on any accidents or incidents and dates and causes of any traffic violations you’ve received.
Accidents on your driving record can increase premiums for three to five years, as being involved in one makes you a riskier driver than those without any accidents on their records. Furthermore, injuries sustained as part of an accident will significantly raise premiums compared to property damage-only accidents.
Even without an accident on your record, speeding tickets can still impact your insurance rates significantly. According to NerdWallet’s calculations, an average driver with recent speeding tickets pays an additional amount each year than someone without such tickets on their records – about $123.
Shopping around and comparing rates is the key to discovering how much car insurance should cost you. Aim for companies with excellent reputations, efficient claims processes and superior customer service; in addition to competitive rates they should also offer affordable monthly payments that fit within your budget. Furthermore, drivers with clean driving records may qualify for discounts to further lower rates.