Average Car Insurance

Average Car Insurance

Car insurance is an absolute necessity if you own a vehicle, but it isn’t cheap. The average cost of full coverage car insurance is $1,555 per year. Depending on where you are located, you could be laying more or less. This is because laws on minimum coverage vary among states; this impacts on the auto insurance costs the average cost for car insurance in each state. Florida, New York and Louisiana are the most expensive states to obtain auto insurance, while Maine, Ohio and Wisconsin offer the cheapest coverage on full auto insurance.

Progressive carried out a categorization of states bases on their average monthly car insurance payments. Some states categorized as high cost are: Maryland, California, Florida, Colorado, Louisiana, Michigan, Delaware and Pennsylvania.

Some of those categorized as medium-cost include Utah, Alaska, Alabama, Oregon, Washington, Mississippi, and Oregon. While those that are categorized as low include Idaho, North Carolina, Indiana, Vermont, Wisconsin Iowa, and Kansas. 

National average car insurance (per year) for full coverage based on other factors besides states: 

  • A good driver with good credit ($1,555)
  • After a speeding ticket ($1,863)
  • After an accident ($2,125)
  • Married couple with a teen driver ($3,777)

National average minimum coverage car insurance rates (per rate) based on other factors aside states

  • A driver with good credit ($545)
  • After a speeding ticket ($680)
  • After an accident ($810)

Average auto insurance costs also differ from company to company. To compare the rates and features of different insurance companies see here.

There are several factors which affect the average cost of your car insurance. Let’s walk through them below.

Factors That Affect The Average Cost Of Car Insurance

1. Age

No doubt, age plays a huge factor in your insurance rates. The risk factors associated with younger drivers are more than those attributed to older drivers. Younger people are more prone to drive carelessly, have less experience, and a poor maintenance culture than older folks. For reasons such as this, younger drivers are bound to pay higher auto insurance rates than older drivers.

2. Location

If you are conversant with insurance policies, then you would know where you are situated play a defining factor on your insurance costs, including the one for your vehicle.  

Location determines the likelihood of getting in an accident, break-ins or theft; mileage you have to cover among other things. Insurance companies use this to determine your risk level and invariably insurance costs.

State laws and minimum insurance requirements determine how much you’ll have to pay for auto insurance, and how much coverage you’ll need.

3. Coverage Options

Another major determinant affecting the monthly cost of your auto insurance is the type of coverage you choose. Coverage amounts by policy vary because they determine how extensive and comprehensive your auto insurance package is. For instance, some states allow a minimum liability insurance coverage of only $10,000. It is also possible that the insurance company may have included packages that you don’t need. For example, you don’t need to carry collision or comprehensive coverage in most cases if you won your car outrightly. However, keep in mind that lowest-priced does not necessarily mean cheapest. Some providers are known for offering cheaper rates, but their levels of coverage are less extensive as others that offer more expensive rates.

4. Driving Experience & Accident History

The level of driving experience and history is also taken into consideration when insurance companies price your auto insurance premiums. Drivers who have more experience get lower rates than newer drivers. Also, those who have exhibited less dive-risk behaviours and have a good driving history would typically get less rates than those who have been involved in accidents or charged with DUIs. However, driving experience does not correlate with age. A 30-year old who has never driven is expected to be charged more than a 23-year old with five years of driving experience. 

5. Vehicle Type

Just as there are different classes of vehicles, there are different insurance coverages for them. You don’t expect a Lamborghini to be insured at the same price as a Mazda. Apart from cost, the purpose of the vehicle is taken into consideration, among other things such as safety, theft ratings, and mileage. If your car has an automatic brake system you could pay less than a car that does not (other things being equal). Also, put in mind that different vehicles have different costs to insure against. If you drive a massive truck, though your passengers are less likely to get injured in a crash, your truck may cause more damage to other vehicles because of its size. The age of the vehicle also influences the average car insurance payments. An older vehicle would attract a lesser average than a newer model. 

6. Mileage

The more you drive, the more susceptible you are to having an accident. The insurance company sees this as a risk factor and raises the stakes when it determines your premiums. This is why auto insurers ask for an estimated annual mileage when you sign up.

7. Gender

Without meaning to be sexist, but the average car insurance costs are also affected by one’s gender, it has been proven statistically that male drivers are more likely to get in a car accident than female drivers. As such, this reflects in auto insurance rates.

A lot of things determine the average cost of your car insurance. While some are avoidable, others are inevitable. The key is driving safely, maintaining a good history and keeping your car is secured and in good working condition. Adherence to these three factors would impact the average cost of your car insurance significantly.