Factors Affecting Car Insurance Rates

Several factors affect your car insurance rate, including your age, location, driving record, vehicle usage, accidents, vehicle type, and more. Plus, the average rate varies from state to state, and each state has its own minimum car insurance requirements 

How much is car insurance per month?

Car insurance on average is $81 per month in low-cost states, $102 per month in medium-cost states, and $146 per month in high-cost states.

Note that it's often cheaper to pay for your policy in full rather than monthly. 

Average car insurance cost by state 

Take a closer look at where your state falls regarding average car insurance cost.

Low-cost states

Average cost of six-month liability-only policy: $81 per month

States included: California, Idaho, Illinois, Indiana, Iowa, Maine, Montana, North Carolina, North Dakota, New Mexico, Ohio, Oklahoma, Tennessee, South Dakota, Vermont, Wisconsin, and Wyoming.

Medium-cost states

Average cost of six-month liability-only policy: $102 per month

States included: Alabama, Arizona, Arkansas, Colorado, Kansas, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, Oregon, Pennsylvania, Virginia, Washington, Texas, and Utah.

High-cost states

Average cost of six-month liability-only policy: $146 per month

States included: Connecticut, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Rhode Island, South Carolina, and West Virginia.

What are the factors that affect car insurance rates?Age

• Age                                                                                                  Significantly impacts car insurance rates. Younger drivers often face higher premiums due to their higher likelihood of accidents and risky driving behaviors. For instance, teens are almost three times more likely to be involved in fatal crashes than drivers aged 20 and older, according to the CDC. However, there are potential discounts available for student drivers and options tailored for seniors that can help mitigate these costs.

  Location

  Your place of residence is crucial in determining your insurance premium. Living in densely populated areas increases the risk of theft, vandalism, and accidents, leading to higher comprehensive and collision coverage costs. Additionally, state-specific insurance requirements, including mandatory liability coverage levels, further influence the overall cost.

  Vehicle Usage

  The purpose and frequency of your vehicle use also affect your insurance rate. Cars used primarily for commuting or pleasure typically incur lower premiums than those used for business or ridesharing services like Uber or Lyft. Higher mileage can also lead to increased rates due to the higher likelihood of accidents.

  Driving Record

  A clean driving record generally results in lower insurance rates. Accidents and traffic violations can increase your premiums. For new drivers without a record, rates may be higher until they establish a history of safe driving.

  Speeding and Traffic Tickets

  A single speeding ticket might not impact your rate significantly, but multiple tickets within a short period can lead to noticeable premium increases. Fortunately, these increases are not permanent, as tickets typically fall off your record after a few years.

  At-Fault Accidents

  Being at fault in an accident will likely raise your insurance rates, though this increase is not permanent. After several years, the surcharge for the accident will be removed, depending on your insurer and state regulations. Some insurers offer accident forgiveness for minor claims, preventing your rate from increasing.

  Not-at-Fault and One-Car Accidents

  The impact of not-at-fault accidents on your rate varies by state and insurer. In some states, your rate remains unaffected, while in others, it might increase. One-car accidents are usually deemed at fault, as no other driver is involved.

  Coverage Selections

  The extent of coverage you choose directly influences your premium. More comprehensive coverage plans cost more, while state-minimum coverage is the cheapest. Your deductible amount also affects your rate; higher deductibles typically result in lower premiums.

  Vehicle Type

  The make and model of your car impact your insurance costs. Factors include the cost to repair or replace the vehicle, theft rates, frequency of claims, and safety features. For example, insuring a sports car or a luxury vehicle generally costs more than a standard sedan due to higher repair or replacement costs.

  Marital Status

  Adding a spouse to your policy can lead to small but beneficial savings and the convenience of a single policy.