What is the cost of auto insurance?

The average cost of auto insurance in the United States is about $1,134 a year, although this varies depending on you, your vehicle, and where you live. If you're curious how much auto insurance would cost you, the answer is, "it depends." Rates are dependent on your zip code, driving record, age, marital status, credit score, choice of ride, insurance background, how much coverage you plan to purchase, and a variety of other factors, so it's difficult to estimate for sure until you've entered most of that information to compare car insurance quotes.

Are you ready to look for auto insurance?

However, if you're just looking for a ballpark number on how much people pay for coverage, you're in luck. The cost of auto insurance in the US is about $1.134 a year, according to the National Association of Insurance Commissioners (or around $95 per month). The NAIC's most recent data is included in the study, which was published in January 2020. According to the NAIC, Americans pay about $611.12 a year for liability insurance (which covers personal accident and property harm liability), $363.08 for crash coverage, and $159.72 for comprehensive coverage. If you don't understand any of the jargon, we have a helpful explainer about how car insurance works. Personal injury prevention (PIP), which covers you and your passengers, and uninsured motorist coverage, which protects you when the other party does not have insurance coverage, are two other elements of auto insurance.

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State-by-state average auto insurance premiums

According to the National Association of Insurance Commissioners, the total cost of auto insurance by state in 2017 was $1,133.92 a year. Driving without at least some protection is illegal in all states except New Hampshire and Virginia. You can go here to find out how much auto insurance is available in each of the 50 states.

Certain protection elements cost increases and limitations on what factors can be used to calculate premiums are subject to state-specific car insurance reductions. However, it is not just regulations that trigger state-by-state disparities in car insurance rates. Insurance companies can charge higher premiums in areas where there are more claims. And if a state is heavily populated, has high crime rates, chronically bad weather, and/or clogged roads, there's a fair chance people are filing lawsuits under the rule.

So, how much can auto insurance cost you? The NAIC report provides a breakdown of the average annual cost of automobile insurance by state. The NAIC's methodology incorporates average premiums for personal injury insurance (PIP) coverage into its average for liability coverage, but depending on the coverage requirements, you may be able to get lower premiums by may coverage in either liability or PIP.

The states with the highest auto insurance rates

According to the National Association of Insurance Commissioners, the states with the highest average auto insurance premiums are Louisiana, Michigan, New York, Rhode Island, and Washington, D.C. As you can see, auto insurance premiums are calculated by a variety of factors. There isn't any rhyme or rationale for why these states have the highest auto insurance rates, and it's likely that other states will take their position as insurers to update their rates the next time.

The states with the lowest auto insurance rates

According to the National Association of Insurance Commissioners, the states with the lowest average auto insurance premiums are Maine, Idaho, Iowa, Wisconsin, and North Dakota. The states with the lowest auto insurance rates are typically among the least heavily populated. Furthermore, state auto insurance minimums are generally less stringent. For example, Idaho does not need PIP or uninsured/underinsured motorist coverage.

The average cost of auto insurance varies by coverage type.

The specific types of auto insurance coverage that comprise your policy can also influence the cost of your monthly premiums. Almost definitely, you'll have liability insurance, which is mandated by law in almost every state. Liability insurance prevents you from financial loss if you kill someone or harm their property while driving.

Then there are the forms of coverage that cover your car, such as comprehensive and accident, which aren't mandated by law but are included in what's known as "full coverage" insurance.

Comprehensive and collision insurance protect you if your vehicle is harmed, whether as a result of a car accident or otherwise. Skipping out on comp and accident insurance will lower your monthly premiums, but it may result in higher costs down the road if you need to pay for major repairs.

This is the average annual premium for various forms of auto insurance coverage in 2017, the most recent year for which data is available, according to the NAIC.

How much does low-cost auto insurance cost?

Since no state requires you to purchase accident or comprehensive insurance, you might be able to get by with just liability insurance, as previously discussed. You could save hundreds of dollars a year on your insurance premiums in this manner. However, you may be on the hook for tens or even hundreds of thousands of dollars out of pocket, so purchasing inexpensive auto insurance might not be the most cost-effective choice in the long run. Our car insurance calculator will help you find out how much your premium would cost.

Car insurance premiums by age and gender on average

Since car insurance premiums are dependent on so many individual variables, predicting what any particular person will pay for car insurance is difficult. Car insurance rates are determined based on a variety of factors, including your zip code, driving background, age, credit score, and the type of vehicle you drive. You can also get various quotes from various providers.

Having said that, we can still look at some sample car insurance quotes to see how much the average driver would pay based on factors such as age and gender. Consider the following scenario for a typical driver: Unmarried 30-year-old female with a clean driving record and a 2014 Toyota Camry. Assume she lives in Minnesota, which is in the centre of the pack when it comes to the average cost of auto insurance in the United States. Her quote for complete coverage policy from one of the country's biggest auto insurers came to $1,136 for the year.

The rate dropped marginally for a typical male driver with the same profile, and it dropped even further when the driver was older, married, and retired. However, an average 18-year-old driver attending college full-time and purchasing their own car insurance will face significantly higher costs, as is normal for teen drivers. Check out the table below to see how the prices for the same vehicle, from the same company, changed as the driver's age and gender changed.

The average cost of auto insurance varies by vehicle type.

Your insurance premiums would also be affected by the type of vehicle you drive. Your insurance rates will be determined in part by the make and model of your car.

2020 Your Driving Costs report by AAA looked at the costs of owning various types of cars. According to the report, the cheapest car to insure was a small SUV, which cost $1,087 per year, and the most costly vehicle to insure was a small sedan, which cost $1,342 per year.

Car insurance costs on average before and after an accident

When it comes time to renew your policy, a single accident will dramatically increase your prices. An at-fault allegation, according to one major insurer, will increase your premiums by an average of 28%. Even if you are not at fault in an accident, the insurance premiums will rise.

According to a Consumer Federation of America report published in 2017, drivers around the country saw rate rises after making lawsuits for incidents they did not cause. According to the report, drivers in Baltimore, MD, and Minneapolis, MN saw average rate rises of more than $200. Progressive had the highest average penalty for not-at-fault injuries of the major insurers included in the report, with average increases of more than 16 percent.

What factors influence the cost of my auto insurance?

Your car insurance premiums are determined by more than a dozen variables. Although and insurer will have their own set of variables and formula for determining risk, there are a few common factors that you would expect to be considered regardless of where you shop for car insurance. Here is a rundown of the major factors that influence your auto insurance rates:

1.Your driving history

When calculating the rates, auto insurance firms usually look back at about five years of driving experience. You will see what they see by requesting your state's driver's license agency's Motor Vehicle Report (MVR). Each state's DMV will have its own fees for ordering an MVR, but they should be fair. For more details, contact your nearest DMV office.

You are seen as less of a risk if you have a clean driving record. If you're only one moving violation away from getting your license suspended, you're considered high risk. Rates are lower because the risk is smaller. High risk, higher rates — pretty easy, right?

2. The type of coverage you want and the amount of coverage desired

In states where auto insurance is required, you must purchase a certain amount of coverage. Included in the coverage are:

• Liability Insurance - When a driver is held responsible for personal harm or property loss, the victim is compensated.

• Personal Injury Protection- When you are in an accident, it pays your medical bills as well as those of your passengers

• Collision insurance- Pays for collision-related damage to the vehicle. If your vehicle is rented or bought with a car loan, this is optional.

• Comprehensive insurance- Pays for damage to your vehicle or theft of your car when it is parked. If your vehicle is rented or bought with a car loan, this is optional.

• Uninsured/underinsured motorist insurance -When the other person is at fault, but he or she does not have insurance or his or her insurance does not cover enough of the resulting medical or maintenance costs, this insurance pays the difference. If your vehicle is rented or bought with a car loan, this is optional.

• Gap Insurance- When the vehicle is stolen or damaged beyond repair, gap insurance covers the difference between the car's depreciated value and the amount you owe on the car loan or lease. It could be optional depending on the lienholder.

In addition to what your state needs as a minimum, you can purchase more or less coverage in each auto insurance component, but your premiums will rise if you add more coverage and fall if you buy less. Request a free quote from Insurezio.com, and one of our agents will assist you in locating a car insurance policy that not only meets your needs but also is affordable.

3. Age

A young driver may turn out to be the best driver ever, but they also have less experience behind the wheel and are therefore more likely to be involved in an accident. The general rule of thumb is that once you reach the age of 25, your auto insurance premiums can begin to fall — but only if you have a track record to back it up.

Your age influences your auto insurance rates for the rest of your driving career. In reality, 20-year-old drivers may pay twice as much for car insurance as drivers closer to the ages of 29 or 30, and car insurance firms consider the prime age target to be between the ages of 45 and 55.

Other car insurance companies raise their prices during this period, so get new quotes if you think your rates could be lower. However, after the age of 55, the prices will most likely plateau until about the age of 65, when they will begin to rise again.

4.Gender and marital status are also important considerations.

Men and single persons are more likely to be involved in an accident, according to estimates. Because of the added risk to the auto insurance provider, whether you are a man or unmarried, your insurance premiums would be higher.

5.How far are you willing to travel?

The more time you spend on the road, the more likely it is that you will be involved in an accident. You will pay more as a result of the increased risk.

6.Your car

Do you own a high-end vehicle? Then extensive and crash coverage would be more expensive. On the less obvious side, some insurers consider the vehicle's driving background, but this does not inherently mean that purchasing a "safer" car would lower your car insurance premiums.

7.Your Credit

Insurers typically look at some variation of your credit score (considered a measure of responsibility), and the higher that is, the lower your premiums will be. Some states make it illegal for auto insurance providers to use your credit score to calculate your rates.

8.Your Zip code

Do you have a lot of injuries in your neighborhood? What about vehicle robberies and vandalism? Unfortunately, this means you'll have to pay more than someone who lives in a less dangerous neighborhood. (This is due to the fact that insurance only works if everybody pools their risk.) For the same cause, renters insurance and home insurance rates fluctuate.

Is it true that filing a petition raises your premiums?

Filing a claim can result in an increase in your premiums. If you are at fault in an accident, you can still make a claim, but be prepared to pay a higher premium as a result, which may be as much as about 50% of your existing premiums. The insurance firm does this to reduce its liability and ensure that you do not get into accidents on a regular basis.

If your loss was not especially serious, you might want to reconsider making a lawsuit. The increased premiums you see after filing will last for months and will ultimately cost more than the loss itself.

How to Save Money on Automobile Insurance

There are many ways to save money on auto insurance from the moment you begin shopping around. And if you do have a car insurance policy, there are several things you can do to lower your premiums:

1. Combine the home and car insurance policies. Many automobile insurance providers have incentives for "bundling" various insurance policies, which means purchasing your auto insurance in addition to your house, tenants, or condo insurance. If you have plans with different insurers, you should consider consolidating them into a single carrier to save money.

2. Using auto insurance incentives to your benefit. You can save money on auto insurance by taking advantage of any available discounts. Each insurer is different, so check with your car insurance provider to see what discounts you qualify for, but some of the most popular car insurance discounts are:

• Safe driver discounts - Save if you've been accident-free for a certain number of years in a row.

• Discounts on safety and security products - Save money if you have anti-theft systems mounted in your vehicle, such as a car alarm or GPS tracker.

• Student discounts - Save if you are a full-time student with a GPA above a certain level.

• Paid-in-full discounts - Save money by paying the annual auto insurance premiums all at once rather than monthly.

3. Increase or decrease the coverage limits or deductibles. One of the most critical steps in the insurance purchasing process is determining how much coverage you need. Your coverage cap is how much the insurance is willing to pay for each form of coverage in the event of an accident, so make sure your limits are high enough to completely protect you in the event of an accident. The higher your coverage limits are set, the more you'll pay each month. You can set lower limits if you choose to pay less per month, but bear in mind that a lower coverage limit can mean you are not adequately compensated in the event of an accident. For example, if you have a $20,000 property damage liability cap and cause $30,000 in damage to another vehicle, you must pay the remaining $10,000 out of pocket. Lower coverage caps imply that you can pay less upfront, but you will end up paying a lot more later if you do not have enough coverage. You can also increase your comprehensive and crash deductibles to save money on your monthly premiums, just make sure you can actually afford the deductible sum when it comes time to file a claim.

4. Look around for new auto insurance. Car insurance premiums fluctuate over time and can rise even though you've been a good driver. Even if you're happy with your current insurer, you might be able to find better coverage elsewhere, and most major providers will offer you a discount just for switching. If you want to compare your options and save money, you should work with insurerio.com insurance to ensure you're getting the best coverage.

Frequently Asked Questions

1. What is the average monthly car insurance premium?

The average cost of car insurance in the United States is $94 per month, or around $1,134 per year, according to the National Association of Insurance Commissioners.

2. How can I reduce the cost of my car insurance?

In addition to changing your coverage amount, you can save money on car insurance by looking for discounts. Most insurance companies provide discounts for safe driving, bundling with other insurance products such as home insurance, association memberships, and other factors.

3. What factors influence the cost of car insurance?

Your driving record; the type and amount of coverage; your age, gender, and marital status; how far you drive; the type of car you're insuring; your credit score; and the city where you live are the primary factors that influence car insurance costs.