People looking for car insurance often have a lot of questions before they find the plan that works for them. How much car insurance costs is among the most common questions in this regard. Of course, this answer isn’t a simple one, as it will depend on a lot of factors. It will be easier for you to figure out a budget if you understand how insurance providers go about setting car insurance rates. In this way, you will know that you’re saving money while also being protected while driving.
How Much Does Car Insurance Cost?
So it’s clear that there are quite a few factors that will influence the cost of car insurance, which makes it pretty difficult to get an accurate number for the insurance price of the average individual. American Auto Association (AAA) states that the average cost of insuring a mid-size sedan in 2021 was roughly $120 per month or about $1300 per year.
Of course, this is just a ballpark figure, made by averaging the nationally collected data, and your price might be considerably higher or lower, depending on your individual situation.
Key things related to car insurance costs
- If you’re married, you are likely to spend about $8 less per month for auto insurance than your single driver friends.
- If you get a DUI, the rate will increase by 83%.
- If you cause an accident, the national average rate will see an increase of around 50%.
- Expect the highest rates for teen drivers. For example, 25-year-olds will pay half the rate of 18-year-olds.
- The cheapest car insurance company is called Auto-Owners and comes with rates as for as $36 per month for minimum coverage.
- When it comes to differences in average car insurance rates by state, you’ll pay a low $28 per month in South Dakota, and a high $198 per month in Michigan.
Factors that affect the average cost of car insurance
1. The type of car insurance policy
A huge role in determining how much you will pay for your car insurance coverage will be its type. Insurance packages that have personal injury protection, accident forgiveness, collision insurance, and/or comprehensive insurance will likely cost more than a state-minimum liability policy.
2. Your location
Population density, weather, and even geography are all factors that will raise or lower your price of car insurance.
3. Change of residence
Expect your auto insurance rate to be higher if you change your address, even if your new home will be only a block away. if the zip code changes. Different states will have different price ranges as well for auto policies.
4. Your age
Rates tend to differ depending on how old you are when getting the auto insurance policy, as there are different risks associated with drivers in different age groups.
5. The type of car you drive
The age, make and model, style, and even price of your vehicle will influence the cost of your insurance plan. You’ll usually spend less on insuring a five-year-old sedan than in the case of a brand-new sports car.
6. Your driving record
Citations and traffic accidents will be very important in determining your car insurance rates, as insurance providers will want you to demonstrate responsible behavior while on the road. And although the points on your license won’t stay there forever, they might stay more on the driving record, depending on your state and how severe the offense was.
7. Your deductible
People that go for higher deductibles have lower insurance bills, which makes higher deductibles seem like the better choice. The issue is that the higher your deductible is, the more you will be required to pay out of your pocket if you are responsible for an accident.
8. Your policy limit(s)
All auto policies will have a minimum. Even so, you can raise the policy limits depending on the level of protection you’re going for.
9. Your eligibility for discounts
Most auto insurance companies have some types of discounts and ongoing offers. These offers will enable you to save a considerable amount of money by going paperless, bundling multiple policy types, driving accident-free, or others.
How much is car insurance in your state?
Insurance costs will differ quite significantly depending on your state of residence. If you live in Vermont, you will have the lowest full coverage rate, paying just around 1,100 per year. Residents of Florida will be on the other side of the spectrum, being charged around $2,600 for full coverage.
What causes these big differences in average costs across states? It will usually be due to several different factors. Prices will usually depend on each state’s laws and regulations. These include anything from policies that affect the cost of medical care to regulations directed toward the rates insurance companies can charge for their services. Of course, the prevalence of insurance fraud, weather trends, and other general conditions and particularities of a state will also have an impact on the prices.
Average cost of car insurance by state
|State||Liability only||Full coverage|
Most expensive states for full coverage car insurance
- Michigan: $418 per month
- Florida: $249 per month
- Rhode Island: $240 per month
Cheapest states for full coverage car insurance
- Vermont: $95 per month
- Maine: $97 per month
- Idaho: $103 per month
Cars that are the most and least expensive to insure
As you’d expect you’ll pay a different insurance premium depending on the car you drive, with some models having higher average insurance costs than others.
One important factor that will influence the difference in cost between more and less expensive cars to insure is their size. The interesting thing is that both larger and smaller vehicles will be more expensive to insure.
This is because larger vehicles are more likely to inflict damage, while smaller vehicles are more vulnerable to damage. You’ll pay a lower insurance premium for a car that is somewhere in the middle when it comes to its size, like a smaller SUV or mid-size sedan.
You’ll see at the end of the cost range any car that qualifies as a luxury car or sports car. These are the two types of cars that are statistically more likely to move around at high speeds while also being more expensive to have fixed when they get into an accident. The average insurance rate will also be influenced by whether the car is likely to be stolen or not. The most common targets of thieves are cars that have parts in high demand, which makes them more expensive to insure.
How much does car insurance cost by age?
Car insurance rates will be higher for young drivers, as years of experience and the age of the driver have a strong influence on the final bill.
It’s no surprise that new drivers will have a bigger chance of getting in an accident behind the wheel, which is why they also pay more for insuring their cars.
You will notice a steep drop in average annual car insurance costs between the ages of 18 and 25. This is because insurance companies consider younger drivers less likely to file insurance claims as well as less risky on the roads. Between the ages of 25 and 55, the drop in average insurance rates will become slower with each year.
Average rates for full coverage car insurance by age
Are there differences in average car insurance costs by gender?
There is just a small disparity in auto insurance rates between genders for drivers aged 30 or more. But in the case of younger drivers, women will pay 13% less than men, while nonbinary drivers will be somewhere in the middle.
Monthly full-coverage insurance rates
There are some states that prevent setting different auto insurance rates based on gender. This means that, when all other factors are equal, drivers in these states will pay the same rates for car insurance, regardless of whether they are male, female, or nonbinary. Here are the states that have legislature against rate differences between genders:
- North Carolina
Why would men be charged more for car insurance?
As young men are more likely to file claims, insurance companies often choose to charge them more than young women. According to the stats provided by insurance companies, young men are more inclined to:
- Receive more DUIs
- Get in more accidents
- Receive more speeding tickets
- Drive more often
How to estimate car insurance
Learning how you can estimate car insurance before buying your favorite car can make you a lot more prepared and ready to sign the contract. The easiest approach is, of course, to just compare car insurance quotes you receive until you get an idea about the average prices and where you stand in relation to them. But you can’t actually get close to those quotes unless you consider the influencing factors.
A great starting point will be the minimum rates of your state, as they will give you a baseline coverage you’d need according to the laws. Then decide on the car you want to buy, its cost, feature, and of course, its size category.
Insuring your car will depend on a lot of factors, including how likely the vehicle model is to be stolen and its safety features. This means that the more you figure out before you get quotes, the better.
As soon as you have these important details, you will have to look around and get quotes that you can compare in terms of price and benefits. To make sure these comparisons are accurate, make sure you use the same amount of coverage for every quote you get.
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