Car insurance is required if you own a car in the United States. Car insurance covers you, your car and other people in the event of a collision. If you don’t have the right coverage, you may be responsible for huge medical bills and vehicle repairs. Each state has its own minimum insurance requirements, but that may not provide the protection you need. It can be difficult to find affordable car insurance quotes with the number of insurance providers available in the country.
Do not settle for the lowest quote on car insurance or the first offer that you get. Compare rates from multiple providers to get the best coverage for the lowest price. Comparing rates from different providers can help you save hundreds of dollars each year. These factors will impact the price of your car insurance. Use these tips to help you find the best car insurers.
Car insurance rates are determined by several factors
Although car insurance companies will provide a quote on their websites, it is not always clear what factors are used to determine your rate. The prices of quotes can vary by hundreds of thousands depending on the company.
Your driving record and your vehicle’s make and model are two major factors that will affect your insurance rate. There are many other factors that affect the final calculation.
The Insurance Information Institute says that while carriers may weigh different factors in determining the quote they give, these elements are the ones that have the greatest influence.
Driving record
Premiums are lower for those who have a clean driving record and have had fewer traffic violations or accidents. Your premiums will likely rise if you are in trouble with the law, or cause an accident that is not your fault. Here are some examples of the possible impact that different types of infractions could have on your insurance costs.
Based on driving records, average annual premiums
| Average coverage | |
|---|---|
| Clean record | $1,738 |
| Conviction for DUI | $2,877 |
| Accident | $2,299 |
| Speeding ticket | $1,869 |
Localization
The rate you get will depend on where you live. People who live in cities pay higher rates than those who live in rural areas. It also matters whether your car is parked on the street or in an enclosed garage. Lower premiums may be possible if your car is better protected.
Auto insurance premiums are more expensive in certain states than elsewhere due to the risk of driving and local laws. This is a summary of the differences in premiums between states.
Based on the location, average annual premiums
| State | Premium for full coverage | Minimum coverage premium |
|---|---|---|
| Alabama | $1,623 | $469 |
| Alaska | $1,559 | $373 |
| Arizona | $1,547 | $555 |
| Arkansas | $1,914 | $470 |
| California | $2,065 | $733 |
| Colorado | $2,016 | $518 |
| Connecticut | $1,845 | $794 |
| Delaware | $1,775 | $787 |
| District of Columbia | $1,855 | $704 |
| Florida | $2,364 | $1,101 |
| Georgia | $1,982 | $756 |
| Hawaii | $1,127 | $345 |
| Idaho | $1,045 | $307 |
| Illinois | $1,485 | $442 |
| Indiana | $1,254 | $367 |
| Iowa | $1,260 | $252 |
| Kansas | $1,698 | $410 |
| Kentucky | $2,128 | $748 |
| Louisiana | $2,724 | $975 |
| Maine | $965 | $294 |
| Maryland | $1,877 | $767 |
| Massachusetts | $1,223 | $510 |
| Michigan | $2,309 | $948 |
| Minnesota | $1,643 | $537 |
| Mississippi | $1,782 | $492 |
| Missouri | $1,661 | $468 |
| Montana | $1,737 | $342 |
| Nebraska | $1,531 | $335 |
| Nevada | $2,246 | $860 |
| New Hampshire | $1,275 | $389 |
| New Jersey | $1,757 | $847 |
| New Mexico | $1,419 | $385 |
| New York | $2,321 | $1,062 |
| North Carolina | $1,325 | $413 |
| North Dakota | $1,264 | $285 |
| Ohio | $1,032 | $328 |
| Oklahoma | $1,873 | $423 |
| Oregon | $1,346 | $610 |
| Pennsylvania | $1,476 | $427 |
| Rhode Island | $2,018 | $749 |
| South Carolina | $1,512 | $558 |
| South Dakota | $1,642 | $275 |
| Tennessee | $1,338 | $371 |
| Texas | $1,823 | $524 |
| Utah | $1,306 | $528 |
| Vermont | $1,207 | $292 |
| Virginia | $1,304 | $441 |
| Washington | $1,176 | $463 |
| West Virginia | $1,499 | $458 |
| Wisconsin | $1,186 | $332 |
| Wyoming | $1,495 | $271 |
Miles driven
You’ll pay more if you drive your car more often. You may be able to lower your insurance costs by driving less.
Age
When it comes to auto insurance premiums, your age is an important factor. Teenagers and younger drivers tend to pay higher premiums because they have less experience behind the wheel. There is also a statistically greater chance of being in an accident. Your premiums will decrease as you age, provided you keep your driving record clean and all other factors are the same. Below is the average drop in rates that drivers experience between the ages of 16 and 60.
Based on age, average annual premiums
| Average coverage | Average minimum coverage | |
|---|---|---|
| 16-year-old* | $7,371 | $2,770 |
| 18-year-old | $5,243 | $1,652 |
| 25-year-old | $2,108 | $666 |
| 30-year-old | $1,850 | $582 |
| 40-year-old | $1,757 | $525 |
| 60-year-old | $1,405 | $494 |
Credit score
Your credit score is used by insurers to assess your likelihood of filing a claim. Higher credit scores are associated with lower claims and higher premiums. Based on national averages, a driver with bad credit may get a quote that is twice the amount of someone with good credit.
It is important to note that every insurance company will not consider your credit score the same. Some companies may not take your credit into account, but most will.
Based on credit score, average annual premiums
| Poor | Average | Good | Excellent | |
|---|---|---|---|---|
| National average | $3,873 | $1,865 | $1,674 | $1,487 |
Vehicle
Insuring some cars may be more expensive than others. Cost of repairs, car cost, safety record, engine size, and likelihood of theft all contribute to the final cost.
Required coverage
Nearly all states require drivers to have basic auto insurance. However, you might need more than the bare-bones coverage. While liability insurance covers the damage you do to other people’s property and vehicles in a collision, bodily injury insurance does not cover injuries or deaths. Personal injury protection (PIP), which covers your health, can be added to your insurance. Comprehensive insurance only covers damage to your car due to a collision, weather, or theft. Full coverage insurance provides comprehensive, liability, and bodily protection. Your car insurance premium will go up the more coverage you have.
Minimum size
Your insurance costs can be reduced by raising your deductible. You can lower your insurance costs by increasing your deductible from $200 up to $500.
Gender
Auto insurance quotes for women are typically more affordable than those for men. This is because women are statistically less likely to be in an accident than men. As we age, however, this difference diminishes. Below is an example of the differences in rates between men & women at different life stages.
Based on gender and age, the average annual premium
| Man (full coverage). | Women (full coverage). | Different | |
|---|---|---|---|
| 18-year-old | $5,646 | $4,839 | $807 |
| 25-year-old | $2,181 | $2,036 | $145 |
| 40-year-old | $1,765 | $1,749 | $16 |
| 60-year-old | $1,552 | $1,537 | $15 |
What should not be included in your car insurance rates?
Although insurance companies may ask for a variety of information when you request a quotation, only a few details are required. Insurers are prohibited by law from setting rates that could be considered discriminatory. Your race and religion cannot be used to determine insurance premiums.
There may be laws that restrict insurers from using information commonly used elsewhere in the country, depending on where you live. In California, Hawaii and Massachusetts, credit-based insurance premiums are either prohibited or severely restricted. In 2021, New Jersey was the latest state that banned insurers from considering credit scores. This includes education and occupation.
How to get car insurance rates
You can find affordable insurance, but it is possible. It is worth taking the time to compare quotes from different insurers to ensure you get the coverage that you require. Although there may be slight variations in the information needed, most insurance companies will ask for the following information to directly impact your auto insurance quote:
- Driving record
- Where the car will be parked
- Driver information: Age, gender, occupation, driver’s license, and state of issuance
- Credit score
- Information about your vehicle: Make, model, age, and VIN
- Required coverage
- Deductible
Questions frequently asked
What is the difference between full coverage and liability car insurance?
Liability insurance will cover damage to property, and compensate others for any injuries you or another driver of your car cause. Liability coverage will also pay for bills related to death or injury to someone else caused by your car or another driver. Full coverage car insurance covers liability, damage to your vehicle in a collision and bodily injury coverage. It even pays for damage to your vehicle due to weather, vandalism, or a fallen tree branch.
How can I get the best rates on car insurance?
Comparing rates from different companies can help you to find the best car insurance rate. To get the best quote, compare rates from both large and small businesses.
What can I do to make my car insurance more affordable?
Your insurance premiums will be lower if you are a responsible and safe driver. You can also lower your car insurance by lowering your coverage or increasing your deductible. However, you should be familiar with your state’s minimum requirements and what the consequences are if you have basic auto insurance and cause a crash.
