What's the average cost of car insurance
- Comparison Shop to Lower Your Car Insurance Cost
- Find the Best Car Insurance Rates
- Cost Factor No. 1: Basic Demographics
- Cost Factor No. 2: The Car You Drive
- Cost Factor No. 3: Your Driving History
- Cost Factor No. 4: Your Credit Score
- Cost Factor No. 5: Your Driving Habits
- Cost Factor No. 6: The Amount of Coverage You Choose
- Cost Factor No. 7: The Type of Coverage You Choose
- How Much Does Car Insurance Cost? A Lot — If You Don’t Shop Around
- Average Cost of Car Insurance
- Average Cost of Home Insurance
- Average Cost of Renters Insurance
- Average Cost of Health Insurance
- Average Cost of Pet Insurance
How much is car insurance going to cost you? It’s not an easy question to answer. The quote you receive could be painfully high or comfortably low based on a number of different factors. But for what it’s worth, the average amount spent to insure a car in the U.S. was $815 a year in 2012, according to the National Association of Insurance Commissioners.
However, as anyone who pays much less — or more — than $815 a year can tell you, there are a lot of variables that affect your car insurance rates.
Some factors, including where you live and what kind of car you drive, can be tough to change. Others, such as your driving habits and the level of coverage you choose, are a bit easier to tweak. I’ll break down these factors and discuss what (if anything) you can do to save a dime on your car insurance.
Comparison Shop to Lower Your Car Insurance Cost
Before we get started, it’s important to mention one thing you can always do to save some money: Shop around. It’s easiest to start online. Our quote generator below can help you do that quickly, eliminating the hassle of calling individual insurers and repeating the same information. Just enter your ZIP code and you’re on your way:
Find the Best Car Insurance Rates
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.
Cost Factor No. 1: Basic Demographics
Your age, sex, marital status, and location all weigh heavily on how much you car insurance costs. That’s because your insurance company has an enormous amount of data that tells them how each of these things makes you more or less of a risk for filing claims.
For instance, if you’re younger (typically, age 25 or below), unmarried, and male, you’ll pay more than an older, married female, who is statistically less likely to file a claim.
Location also has a huge impact on your car insurance rates. State laws that regulate car insurance can have a big effect. Michigan, the most expensive state for car insurance premiums according to Insure.com, tops the list because residents get unlimited lifetime personal injury protection for medical expenses resulting from crashes. Montana comes in second, in part because crash fatality rates are very high, and insurers think driver safety laws are too lax.
You’ll also almost always pay more in densely populated areas, where you’re at more risk for an accident. This is likely why Washington, D.C., Connecticut, Rhode Island, and New Jersey are all among the top 10 most expensive states. Areas prone to natural disasters can mean car insurance costs a premium, too, which is why Louisiana is fourth on the list.
How to save: Unfortunately, this is the toughest category for eking out some savings. You’re unlikely to move or get married just to save on how much car insurance costs.
Still, it’s worth at least keeping in mind how big an impact where you live can have on what you pay. According to CarInsurance.com, even ZIP codes that aren’t terribly far from one another can vary dramatically on average costs. For more details on how costs vary from state to state, keep reading.
How much is car insurance? A state-by-state breakdown
Below, you’ll see how the cost of car insurance varies by state, according to two measures. The first number is the average expenditure per state, drawn from 2012 data from the National Association of Insurance Commissioners. This figure is the total amount collected in each state for liability, comprehensive, and collision premiums, divided by the total number of insured vehicles.
The second number compares the average premium for similar coverage across every state and Washington, D.C., according to a 2015 study by Insure.com. The study averaged quotes for a full-coverage policy for the same customer driving 20 of the best-selling cars in 10 ZIP codes per state.
As you’ll see, just because a state has a high average expenditure doesn’t necessarily mean it has a high average premium (and vice versa). Remember that the first number takes into account how much customers actually choose to spend — they may opt out of pricier coverage options or choose lower coverage limits — whereas the second number is simply an average of quotes for a policy that includes everything.
|State||Average spent on car insurance (rank)||Average premium for a complete policy (rank)|
|Alabama||$659 (37)||$1,320 (22)|
|Alaska||$873 (13)||$1,410 (18)|
|Arizona||$781 (18)||$1,103 (37)|
|Arkansas||$679 (35)||$1,239 (27)|
|California||$749 (22)||$1,643 (9)|
|Colorado||$737 (25)||$1,245 (26)|
|Connecticut||$986 (9)||$1,690 (7)|
|Delaware||$1,065 (6)||$1,542 (13)|
|District of Columbia||$1,154 (2)||$1,799 (3)|
|Florida||$1,127 (4)||$1,742 (5)|
|Georgia||$768 (20)||$1,519 (14)|
|Hawaii||$735 (27)||$1,114 (34)|
|Idaho||$534 (51)||$877 (49)|
|Illinois||$731 (28)||$1,079 (39)|
|Indiana||$637 (40)||$1,033 (41)|
|Iowa||$561 (49)||$886 (48)|
|Kansas||$632 (42)||$1,147 (33)|
|Kentucky||$759 (21)||$1,341 (21)|
|Louisiana||$1,112 (5)||$1,774 (4)|
|Maine||$582 (47)||$805 (51)|
|Maryland||$966 (11)||$1,590 (11)|
|Massachusetts||$976 (10)||$1,460 (16)|
|Michigan||$1,048 (7)||$2,476 (1)|
|Minnesota||$718 (29)||$1,222 (29)|
|Mississippi||$748 (23)||$1,584 (12)|
|Missouri||$683 (34)||$1,112 (35)|
|Montana||$658 (38)||$1,866 (2)|
|Nebraska||$616 (44)||$1,086 (38)|
|Nevada||$906 (12)||$1,248 (25)|
|New Hampshire||$716 (30)||$905 (47)|
|New Jersey||$1,129 (1)||$1,595 (10)|
|New Mexico||$695 (32)||$1,237 (28)|
|New York||$1,152 (3)||$1,013 (42)|
|North Carolina||$611 (45)||$986 (44)|
|North Dakota||$576 (48)||$1,377 (19)|
|Ohio||$634 (41)||$843 (50)|
|Oklahoma||$737 (26)||$1,496 (15)|
|Oregon||$741 (24)||$1,211 (30)|
|Pennsylvania||$827 (16)||$1,304 (23)|
|Rhode Island||$1,034 (8)||$1,656 (8)|
|South Carolina||$772 (19)||$1,210 (31)|
|South Dakota||$556 (50)||$1,180 (32)|
|Tennessee||$673 (36)||$1,263 (24)|
|Texas||$858 (14)||$1,449 (17)|
|Utah||$713 (31)||$1,059 (40)|
|Vermont||$642 (39)||$957 (45)|
|Virginia||$691 (33)||$1,008 (43)|
|Washington||$809 (17)||$1,110 (36)|
|West Virginia||$846 (15)||$1,716 (6)|
|Wisconsin||$598 (46)||$930 (46)|
|Wyoming||$618 (43)||$1,371 (20)|
Cost Factor No. 2: The Car You Drive
You probably didn’t think about how your car would affect your insurance rates when you bought it, and you probably won’t trade it in just because of your rate. However, just as your insurance company assumes you’re a bigger or smaller risk based on your own demographics, it assigns risk based on the car you drive, too.
How to save: When it’s time to shop for a car, keep this rule of thumb in mind: The faster the car can go, the bigger the risk of a crash, and the more you’ll pay.
If you drive a sensible family car such as a minivan, sedan, or SUV, you probably won’t pay nearly as much as someone who drives a pricey, high-performance sports car. In a recent analysis, the Nissan GT-R Nismo, Mercedes-Benz SL65 AMG Convertible, Dodge SRT Viper, Porsche 911 Carrera S Cabriolet, and Audi R8 5.2 Spyder Quattro were the most expensive to insure. On the flip side, the Jeep Wrangler Sport, Jeep Patriot Sport, Honda CR-V, Dodge Grand Caravan, and Honda Odyssey were easiest on the wallet.
You can also save a bit of money by considering a used car, which will almost always be cheaper to insure than a new one. Anti-theft devices such as alarms, anti-lock brakes, and other safety-focused equipment can also save you some cash.
Cost Factor No. 3: Your Driving History
This one is probably the most obvious factor affecting your car insurance, and it may seem like the fairest one. The more tickets and violations you have, the higher your rates are going to climb. Some tickets will be worse than others: For instance, if you’re cited for DUI or reckless driving, your insurance premium could nearly double, according to Bankrate.
Speeding or running a red light will still raise your rates, but much less. In fact, your insurer may not raise your rates after one speeding ticket. The increase you see may also partially depend on how fast you were going. The average bump is 21% if you were caught going up to 15 mph over the speed limit, but that rises to 30% if you were flooring it at 31 mph or more over the limit.
How to save: You can’t rewrite the past, but you can be a safer driver going forward. If your insurer offers one, you can even consider installing a tracker that records data on driving habits such as mileage, sudden acceleration or deceleration, excessive speed, rough turns, and whether you drive a lot at night. Typically, you won’t be penalized for bad driving, but you could be rewarded for good driving. You may also be able to save by taking a defensive driving course.
Cost Factor No. 4: Your Credit Score
If you’re wondering what your credit score has to do with how much you pay for car insurance, it’s a good question. Insurers cite an abundance of data showing the higher your credit score, the less likely you are to file a claim. The reverse is also true: If your credit score is poor, you’re at a greater risk for filing a claim. This controversial practice is actually illegal in a few states (California, Hawaii, and Massachusetts), but otherwise, it’s fair game.
How to save: There’s no quick fix for bad credit, but raising your credit score is still enormously worthwhile because it affects far more than what you pay for car insurance. Paying your bills on time for an extended period is one of the best things to do for your credit score. Reducing large balances and being judicious about opening new credit accounts can also help. For more on what your credit score affects and how to raise it, check out our article, What is a Good Credit Score?
Cost Factor No. 5: Your Driving Habits
Your driving habits make up your daily driving routine. Do you commute daily via car, and for how long? Do you ever use your car for business purposes? Does your car gather dust until the weekend because you use public transportation during the week? Do you park on the street, in a shared lot, or in your own private garage?
All of these things add up to paint a picture of your risk of getting into a crash. Accordingly, they can affect your car insurance premium.
How to save: It sounds obvious, but the less you drive, the less of a risk you are for your insurance company. Moving closer to work to reduce your mileage, taking public transportation, or carpooling are a few tactics that can save you a lot of money — just be sure to report any such chances to your insurer so that you can reap the benefits.
Cost Factor No. 6: The Amount of Coverage You Choose
When you’re shopping for car insurance, there are a couple of numbers that will weigh heavily on what you pay. The first is your limits — that is, the maximum amount your insurance company will pay in the event of a claim. Limits are usually written like this: $50,000/$100,000. That means your insurer will pay up to $50,000 per person and $100,000 per accident.
The second number to know is your deductible. That’s how much you’ll pay out of your own pocket when you make a claim. A common deductible is $500, but they can go as low as around $100 and as high as $1,000 to $2,000.
How to save: You don’t want to overpay for coverage you don’t need, but you also don’t want to skimp and leave yourself on the hook for thousands after an accident.
You’ll be required to have a certain minimum limit depending on where you live. For instance, as a Tennessee resident, I’m required to have at least $25,000 per person and $50,000 per accident in bodily injury liability coverage as well as $15,000 in property damage liability coverage.
However, just because you are only legally required to have a certain amount of coverage doesn’t mean it’s a good idea to carry only the minimum, even if that will save you money. That’s because you could lose your assets, such as your savings or even your house, if someone’s medical or property damage bills exceed your ability to pay when you’re at fault.
That means if you have significant assets, you’ll want to protect them with more coverage. Experts often recommend $100,000 per person and $300,000 per accident as a minimum.
Your deductible can be a better place to save. Agreeing to pay $1,000 instead of $100 in the event of a claim can save you a lot of money — but it’s a tactic you should only use if you have that $1,000 stashed away in your emergency fund, ready to pay that bill should you need it.
Cost Factor No. 7: The Type of Coverage You Choose
The types of coverage I discussed above — bodily injury liability and property damage liability — are required when you buy car insurance. There are some other types of coverage that you may be able to skip, however.
How to save: Instead of blindly paying for every kind of coverage, carefully evaluate whether they make sense for your individual situation.
For instance, personal injury protection (PIP) isn’t required in all states. It helps pay for your or your family’s medical bills after a crash. However, it’s probably not necessary if you and your family have adequate health insurance. It also doesn’t make sense to pay for roadside assistance if you’re already a member of AAA.
Comprehensive and collision coverage will be required if you’re financing or leasing your car, but are optional if that’s not the case. Comprehensive covers damage to your vehicle from car theft, vandalism, and other calamities that don’t involve actual crashes. Collision coverage is similar to comprehensive coverage, but covers actual crash-related damage to your vehicle.
If you’re not required to have comprehensive or collision, it might make sense to drop this pricey coverage if you drive very infrequently or if your car’s value is very low.
How Much Does Car Insurance Cost? A Lot — If You Don’t Shop Around
Remember that one of the best things you can do to save on car insurance has nothing to do with who you are, where you live, the coverage you select, or how you drive. Instead, it’s simple comparison shopping: You should always look around to make sure you get the best deal, since each company places a slightly different emphasis on the factors I outlined above.
One other critical reason to shop around is that different insurers offer different discounts. Some will offer you a break for being a good student, a member of certain organizations, active-duty military, or for bundling other policies such as home insurance with the same company. That’s on top of common price breaks for driving less, driving a low-risk car, or having a good credit score, among the other factors I discussed in this article.
Online quote tools can be particularly helpful as you start your search. However, remember that the quicker the quote, the more information you’ll have to provide further down the line. Given how many variables affect how much car insurance costs, you’ll eventually have to provide a fair amount of personal information to get the most accurate price. Good luck!See Also: Get 2x Points on All Your Travel and Dining >> Recommended For You A Great Way To Pay Off Debt With A No Interest Credit Card
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Cost of Auto Insurance
How does my auto insurance company decide what it charges me? That's probably the most asked, least understood question about motor vehicle insurance coverage. Each insurer has thousands of auto insurance rates in every state it does business—rates for each type of car, each driver and every geographical area in the state. Each company also has its own surcharges and discounts available that impact these rates.
Most insurers have three basic goals in mind:
- They need to make enough money to cover all their policyholders' claims and pay their overhead expenses (staffing, light bill, phone bill, etc.), and if they're publicly held, still have enough money left over for their shareholders.
- They want to balance their risk by charging higher rates to drivers who file more costly claims, more often and lower rates to those drivers who file less expensive claims, less often.
- They want to stay competitive with other insurers in the markets they do business.
State Government Regulations
How your insurance rates are set also depends in part on which state you live in, because rates are regulated on a state-by-state basis. The insurer has to follow the regulations of the state you live in. Click on your state below to contact your state insurance department.
Also visit: Colorado | New Mexico | Utah | Wyoming
Auto Insurance Cost Q&A
Q. Why are my auto insurance premiums rising?
A. Over the past two years, both the accident rate and the size of insurance claims have climbed dramatically. These are the largest and most volatile components of auto insurance. A white paper, done by the Insurance Information Institute (iii) documents the increase in costs, suggesting some factors that may be causing the increases. The paper also discusses what insurance companies are doing to keep costs in check and what consumers can do to reduce the cost of their own insurance.
Click here to read the iii White Paper: More Accidents, Larger Claims Drive Costs Higher (October 2016) by iii
Click here to see the Slide Deck on Personal Automobile Insurance Rates (October 2016) by iii
Q. Why do things like my age, gender, credit and driving record affect what I pay for auto insurance?
A. What you pay for insurance is largely based on what kind of risk the company predicts you will be, based on known factors like your driving history, the kind of car you drive, how old you are, your gender, your marital status and where you live. These judgments aren't just based on instincts or whims. Insurance rates are based on a wealth of statistical data compiled by your company over a long period of time (commonly up to 20 years). Most insurance companies divide auto risks into three basic types:
- Preferred (low risk)
- Standard (average risk)
- Non-standard (a nice way of saying high risk)
Q. Why does it matter what kind of car I drive?
A. Increasingly insurance companies are basing insurance rates on their claims experience when it comes to the safety record of the make and model of vehicle you are driving. Factors insurance companies may likely consider: crashworthiness, safety features (i.e. airbags, automatic seatbelts, anti-lock brakes), popularity with thieves, cost to repair, age of the vehicle. Every year new cars are separated into various categories according to price by insurers. The number of categories vary from one insurance company to another, but a basic premium is assigned to each price group. For more information on crash testing click here for the Insurance Institute for Highway Safety (IIHS).
Q. Why do my premiums go up if I get a traffic ticket or I'm involved in an accident?
A. Getting several tickets in a short period of time or being involved in an accident can put you in a higher risk classification depending on the severity of the violation and cost of the accident. However, your rates won't automatically go up.
Q. Why do auto insurance premiums vary depending on what I use my car for?
A. Typically, cars are classified based on whether they are used for driving to work, business, pleasure or farming. Cars used primarily for pleasure tend to have the lowest premiums, while cars used for business generally have higher premiums. Insurance companies determine classifications by the number of miles driven per year since the more you drive your car the more likely you are to get into an accident.
Q. What is the average cost of auto insurance?
The average insurance expenditure is calculated by adding all auto insurance premium collected for liability, comprehensive and collision coverages, and dividing by the number of insured cars for the year. This average is based on all policies - including liability-only and policies with optional comprehensive and collision coverage. Limits on policies vary widely and are based on state requirements as well as consumer choice.
In 2014, the countrywide average expenditure was $866, an increase of 2.98% over the previous year. The median state average expenditure was $783.according to a 2017 report from the National Association of Insurance Commissioners. In 2013 (the latest data available), the average expenditure was highest in New Jersey at $1,264, followed by Michigan at $1,227, and New York at $1,205.
Cost of Auto Insurance by State
The following chart is based on the latest data from the 2017 National Association of Insurance Commissioners on 2013-2014 premiums. It shows the "average expenditure" - the total premium collected in each state for liability, comprehensive and collision coverage divided by the number of insured vehicles. The average expenditure reflects not only the cost of insurance, but how much people choose to purchase. States have different requirements and many people choose to purchase more than the minimum required limits. Keep these factors in mind when comparing states.
|State||2014 Average Expenditure||2014 |
|2013 Average Expenditure||2013 |
|2012 Average Expenditure||2012 |
ValuePenguin researched and crunched the numbers to get you the average cost of car insurance by state. Use our data to see what your states average premiums are to get a better idea of what you should be paying for insurance.
To jump directly to the different types of insurance's average cost, click on the contents links below
- Car Insurance
- Car Insurance Rates: By Age
- Car Insurance Rates: By Gender
- Homeowners Insurance
- Renters Insurance
- Health Insurance
- Pet Insurance
Average Cost of Car Insurance
The average annual cost of car insurance paid in the United States was $907.38 in 2014 according to a study commisioned by Quadrant Information Services. This figure will vary wildly state to state and does not always include all forms of coverage and may not be accurately reflect your coverage needs. Scroll through the table below to find the average cost of car insurance in your state or use the form to find a cheaper quote for auto insurance:
|State||Monthly Car Insurance Rate||Annual Car Insurance Rate|
Find The Cheapest Auto Insurance Quotes In Your AreaCurrently Insured? Yes No Find Insurers Currently Insured? Yes No Find Insurers
Data from various states' Departments of Insurance show that annual car insurance premiums are on the rise in the majority of states across the nation. The average cost of insurance for car owners of insuring their vehicles from accidents and other events has generally increased, with the exceptions of Arkansas, Georgia, North Carolina, and Virginia, who all saw their car insurance premiums drop between 1% and 5% in the last year. These quotes for automobile insurance in select states across the country should give you a ballpark estimate for average annual car insurance.
Car Insurance Rates by Age
Auto insurance quotes will vary significantly depending on the age of the driver or applicant. Young drivers are notoriously more dangerous behind the wheel and because of that, insurance companies charge higher rates on policies covering young drivers. The chart below will show you how drastically car insurance quotes fluctuate based on your age. Each dollar amount in the graph below represents the average annual cost at that age.
If you're interested in reading more about how your age affects your car insurance rates check out our full analysis here.
Car Insurance Rates by Gender
Amongst those drivers that have had no violations or accidents within the past 3 years, auto insurance rates are fairly similar with the exception of young drivers. Our data, which looked at rates from 54 different insurance companies, showed that 19 year old male drivers paid an average of 12% more in car insurance premiums each year over their female counterparts. Why is this the case? While gender is not a direct ratings factor that insurance companies look at, the data behind the gender shows that men tend to drive more often, receive more speeding tickets, be involved in more accidents, and receive more DUI convictions than women!
Average Cost of Home Insurance
The average cost of homeowners insurance throughout the United States is $978 per year. Take a look at our table below to get an idea of how much it costs in your state:
|State||Monthly Home Insurance Rate||Annual Home Insurance Rate|
Home insurance is designed to cover homeowners in the event of any unforeseen catastrophe that damages their home. The average cost of home insurance will be influenced primarily by the location of your residential property and the extent of your insurance coverage. Several types of home insurance are common or typical to specific regions or locales, such as damage to floodwaters, hurricanes, earthquakes, etc. As a general rule, the Federal Reserve Bureau says you can estimate the expense of homeowners insurance by dividing the value of your home by 1,000 and then multiplying that number by $3.50. Using average home price data from AARP, here are some typical annual homeowners insurance prices from around the country, ValuePenguin has constructed a table for your reference.
Average Cost of Renters Insurance
The average cost of renters insurance for 2016 (for $20,000-$30,000 in coverage):
|State||Monthly Renters Insurance Rate||Annual Renters Insurance Rate|
If you're one of the millions of Americans who have forgone buying a house in exchange for renting a place, you may want to consider renters insurance as a way to protect your personal belongings. Renters insurance protects your studio, walk-up apartment, or elevator apartment against events such as destruction of property from fire, vandalism, and theft. Looking at some of the average costs of renters insurance in our four representative states, ValuePenguin thinks the monthly premium is cheap enough and worth the peace of mind knowing you can at least recover the cost of any lost or damaged items.
Average Cost of Health Insurance
|State||Monthly Health Insurance Rate||Annual Health Insurance Rate|
|New York||$382 / $932||$4,584 / $11,184|
|California||$173 / $416||$2,076 / $4,992|
|Illinois||$174 / $383||$2,088 / $4,596|
|Texas||$189 / $421||$2,268 / $5,052|
Health insurance is an important investment to make in oneself, family members, and loved ones. According to eHealthInsurance's 2011 Annual Insurance Survey, the average monthly premium for individuals in the United States was $183 (or $2,196 per year). Furthermore, the average monthly premium for families was $414 (or $4,968 per year). Between 2010 and 2011, average premiums increased 9.6% for individual policies and 5.6% for families. The average cost of health insurance ranges between $119 in Iowa and $382 in New York. ValuePenguin's table has a few examples of average annual premiums for individuals and families in select states to give you an idea of the average cost of medical insurance. For a full treatment of the average cost of health insurance see our in depth article.
Average Cost of Pet Insurance
|State||Monthly Pet Insurance Rate||Annual Pet Insurance Rate|
Insurance companies providing pet health coverage factor in the geographical region your pet lives in when determining quotes for your premium. In a 2014 survey of the market, ValuePenguin found that on average, medical insurance prices for pooches in urban households could be 20 - 40% higher than quotes for the same dog living in a smaller town or different geography. The above table has estimated monthly cost of veterinary insurance for a two-year old Yorkshire Terrier, averaged across the expected monthly premiums of the different plans at several major pet insurance providers. To compare across different insurance policies for your pet, use ValuePenguin's pet insurance comparison tool here.