How much is car insurance?

The average cost by state, just so you know.

If you’re wondering how much car insurance is going to cost you, well, the answer is “it depends.” Rates are based on your zip code, driving record, age, marital status, credit score, choice of ride, how much coverage you decide to buy and a bunch of other things, so, unless you’ve entered most of that info to compare car insurance quotes, it’s hard to estimate for sure.

But if you’re just trying to get a ballpark figure about how much people pay for coverage, you’re in luck. The average cost of auto insurance in the U.S. is around $1,099 per year (or about $92 per month), according to a report from the National Association of Insurance Commissioners. The report, from December 2017, comprises the NAIC’s most recent data.

Per NAIC, Americans pay around $538.73 a year for liability insurance (which includes bodily injury liability and property damage liability), $322.61 for collision coverage, and $148.04 for comprehensive coverage. If you have no idea what any of that jargon means, we have a handy explainer on how car insurance works. Some of the other components of car insurance include personal injury protection (PIP), which protects you and your passengers, and uninsured motorist coverage, for when the other party doesn't have insurance coverage.

What determines the cost of my car insurance?

There are over a dozen factors that go into determining your car insurance rates. While each company will have their own list of factors and their own formula for assessing risk, there are a few standard factors that you can expect to be taken into account no matter where you’re shopping for auto insurance.

Here’s a breakdown of the big factors that determine your car insurance rates:

Your driving record

Typically, car insurance companies look back at about five years of driving history when determining your rates. You can see what they see by ordering your Motor Vehicle Report (MVR) from your state’s driver’s license agency. Each state’s DMV will have their own fees for ordering an MVR, but it should be relatively cheap. Contact your local DMV office for more details.

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If you’ve got a clean driving record, you’re seen as less of a risk. If you’re one moving violation from having your license revoked, you’re seen as a big risk. Low risk, lower rates. High risk, higher rates. It’s pretty straightforward.

The kind of coverage you want (and how much you want)

In states that mandate car insurance coverage, you’ll need to purchase a minimum amount of coverage. Coverage includes:

  • Liability insurance. Reimburses the victim in a car accident when a driver is liable for bodily injury or property damage.
  • Personal injury protection. Pays your medical bills and those of your passengers when you’re in an accident.
  • Collision insurance. Pays for damage to your car incurred in a collision. Optional unless your car is leased or purchased with a car loan.
  • Comprehensive insurance. Pays for damage to your car or the theft of your car when it’s parked somewhere. Optional unless your car is leased or purchased with a car loan.
  • Uninsured/underinsured motorist insurance. Pays the difference when the other party is at fault but he or she doesn’t have insurance or his or her insurance doesn’t cover enough of your resulting medical or repair bills. Optional unless your car is leased or purchased with a car loan.
  • Gap insurance. When your car is stolen or wrecked beyond repair, gap insurance pays for the difference between how much the car’s value has depreciated and how much you owe on the car loan or lease. Depending on lienholder, it may be optional.

Beyond what your state requires as a minimum, you can purchase more or less coverage in each auto insurance component, although your premiums will increase the more coverage you add on and decrease if you purchase less coverage. Get a free quote from Policygenius, and one of our agents can help you find a car insurance policy that not only fits your needs but also won’t break the bank.

Age

A young driver may turn out to be the best driver ever, but they’re also less experienced behind the wheel and, therefore, more likely to get into an accident. The general rule of thumb is that your car insurance rates will start to drop once you reach the age of 25 — but only if you’ve got the track record to prove it.

Your age affects your car insurance premiums throughout your entire driving life. In fact, 20-year-old drivers may pay twice as much for car insurance than drivers closer to age 29 or 30, and car insurance companies consider the prime age target to be between 45 and 55 years old.

Other car insurance companies increase rates during that time — make sure you get new quotes whenever you feel like your rates could be lower. However, after age 55, your rates will probably plateau until around age 65, when they'll start rising again.

Gender & marital status

Blame statistics, which show men and single people are more likely to get into an accident. This increased risk to the car insurance company means if you’re unmarried or male, you’ll pay higher insurance premiums.

How far your drive

The more time spent on the road, the higher the chance that you’ll get into an accident. You’ll pay more for the added risk.

Your car

Drive an expensive car? Well, then, comprehensive and collision coverage is going to cost more. On the less obvious side, some insurers also consider the car’s history on the road, though that doesn’t necessarily mean buying a “safer” car will lower your car insurance rates.

Your credit

Insurers generally look at some version of your credit score (it’s considered a metric of responsibility) and the better it is, the lower your rates could be. Some states prohibit auto insurance companies from using a credit score to determine your rates.

Zip code

Do a lot of accidents happen in your neighborhood? What about car thefts or vandalism? Unfortunately, that means you’ll pay higher rates than someone who lives in a less risky neighborhood. (That’s because insurance only works if everyone pools their risk together.) The same thing happens to renters insurance and home insurance rates for the same reason.

How filing a claim could increase your premiums

Filing a claim can raise your premiums. You should always file if you’re at fault in an accident, but be prepared to pay a higher premium as a result, which could be as high as nearly 50% of your current premiums. The insurance company does this to reduce its risk and make sure you don’t repeatedly get into accidents.

If the loss you suffered isn’t particularly bad, you may want to consider not filing a claim. The increased premiums you see after filing can stay for months and may eventually become more expensive than the loss in the first place.

Discounts on your car insurance

You can reduce your car insurance premiums by making use of certain discounts. Every carrier is different, so check with your car insurance company. Your methods may vary, but some of the most common types of car insurance discounts are as follows:

  • Safe driver discounts. You may be able to get a discount for demonstrating a history of driving safely – no accidents – or for taking a driver’s education class.
  • Safety and security equipment discounts. Installing anti-theft devices, such as a car alarm or a LoJack, could result in a discount.
  • Fraternity, sorority, university, and alumni discounts. Being affiliated with some universities or fraternities can result in premium discounts. Having good grades while in school will also result in lower premiums. Check out our guide to car insurance discounts for students.
  • Bundling discounts. Some insurers who offer many insurance products will allow you to save on those products by purchasing multiple policies from the same insurer. Many people bundle their renters or homeowners insurance with their car insurance and save.
  • Paying annually instead of monthly. Your insurer may offer you a discount if you opt to pay your car insurance premiums for the year all at once instead of spreading them out over each month.

The average cost of car insurance by state

In almost every state, driving without at least some insurance is illegal. You can go here to find out exactly how much car insurance is required in all 50 states.

There are state-mandated car insurance discounts for certain safety features, rate increase approvals and limits on what factors can be used to set premiums. But it’s not just laws driving state-by-state differences in car insurance rates. Insurance companies may charge higher prices in places where people are filing more claims. And if a state’s densely populated, crime rates are high, the weather’s consistently bad and/or its highways are mess, well, then, there’s a good chance people are filing claims on the reg.

So where is car insurance likely to cost you? Below is a breakdown of the average annual cost of car insurance by state, courtesy of the NAIC report. The NAIC’s methodology folds average premiums for personal injury protection (PIP) coverage into its average for liability coverage, but it is possible, depending on your coverage needs, to get lower premiums by reducing coverage in either liability or PIP.

How much is cheap car insurance?

Because no state mandates that you buy collision or comprehensive insurance, you may be able to get away with buying only liability insurance. You could save hundreds of dollars per year on your premiums that way. However, this means you could be on the hook for tens or even hundreds of thousands of dollars out of pocket, so in the long run buying cheap car insurance may not be the most cost-effective option.

Average Premium by State, 2015

LiabilityCollisionCompCombined
Alabama$394.21$317.96$156.31$868.48
Alaska$539.68$350.81$137.26$1,027.75
Arizona$508.76$277.96$186.12$972.85
Arkansas$394.13$321.80$190.41$906.34
California$489.66$396.55$100.54$986.75
Colorado$520.04$287.00$174.61$981.64
Connecticut$650.94$368.51$131.62$1,151.07
Delaware$799.30$318.77$122.49$1,240.57
District of Columbia$628.82$468.67$233.24$1,330.73
Florida$857.64$282.96$116.53$1,257.13
Georgia$557.38$331.83$159.18$1,048.40
Hawaii$458.54$313.17$101.56$873.28
Idaho$344.29$219.05$116.55$679.89
Illinois$446.72$309.71$128.13$884.56
Indiana$382.68$250.29$122.06$755.03
Iowa$299.18$219.75$183.53$702.46
Kansas$358.24$263.33$241.36$862.93
Kentucky$529.21$267.91$141.39$938.51
Louisiana$775.83$414.36$215.17$1,405.36
Maine$338.87$259.98$104.98$703.82
Maryland$609.74$353.99$152.72$1,116.45
Massachusetts$606.04$388.28$134.96$1,129.29
Michigan$795.32$413.83$154.85$1,364.00
Minnesota$456.82$234.40$184.27$875.49
Mississippi$460.50$323.22$210.33$994.05
Missouri$415.88$275.28$181.27$872.43
Montana$386.29$265.32$211.91$863.52
Nebraska$364.64$237.13$229.25$831.02
Nevada$681.56$303.86$117.63$1,103.05
New Hampshire$400.56$307.42$110.77$818.75
New Jersey$869.57$381.86$131.35$1,382.79
New Mexico$488.03$276.98$172.57$937.59
New York$804.51$385.02$171.12$1,360.66
North Carolina$359.42$293.59$136.08$789.09
North Dakota$298.18$244.09$231.04$773.30
Ohio$397.11$269.84$121.61$788.56
Oklahoma$461.01$318.47$225.84$1,005.32
Oregon$584.13$226.83$93.87$904.83
Pennsylvania$499.06$327.24$144.21$970.51
Rhode Island$759.80$411.51$132.19$1,303.50
South Carolina$527.09$265.07$180.94$973.10
South Dakota$300.22$208.58$258.11$766.91
Tennessee$413.91$309.07$148.45$871.43
Texas$528.75$374.49$206.42$1,109.66
Utah$497.53$265.90$109.50$872.93
Vermont$343.12$295.42$125.48$764.02
Virginia$425.61$280.52$136.54$842.67
Washington$596.67$265.74$106.38$968.80
West Virginia$491.83$329.67$204.28$1,025.78
Wisconsin$374.37$226.00$136.81$737.18
Wyoming$321.04$278.83$247.57$847.44
**Countrywide$538.73$322.61$148.04$1,009.38**

The most expensive states for car insurance

As you can see, car insurance rates are determined by many different variables. There’s not a lot of rhyme or reason to why these states yield the highest auto insurance rates, and it’s possible that other states will take their place the next time insurers update their rates.

Highest Average Premium by State, 2015

LiabilityCollisionCompCombined
Louisiana$775.83$414.36$215.17$1,405.36
New Jersey$869.57$381.86$131.35$1,382.79
Michigan$795.32$413.83$154.85$1,364.00
New York$804.51$385.02$171.12$1,360.66
District of Columbia$628.82$468.67$233.24$1,330.73

The cheapest states for car insurance

The cheapest states for car insurance are generally among the least densely populated. Plus, state car insurance minimums are largely less intense. Idaho, for instance, doesn’t mandate PIP or uninsured/underinsured motorist coverage.

Lowest Average Premium by State, 2015

LiabilityCollisionCompCombined
Idaho$344.29$219.05$116.55$679.89
Iowa$299.18$219.75$183.53$702.46
Maine$338.87$259.98$104.98$703.82
Wisconsin$374.37$226.00$136.81$737.18
Indiana$382.68$250.29$122.06$755.03

Disclaimer: Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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