Car insurance is one of the least entertaining subjects to think about, yet it’s one that every driving adult has to consider at least once a year. And for the past few years, it has been a major driver of inflation in the United States for various reasons, in particular the skyrocketing repair costs of modern, tech-laden cars.
Finding the best rates can be challenging, and some of the most important factors that decide insurance costs are out of your control, such as where you live. That said, it’s possible to find reasonable rates by shopping around and arming yourself with as much information as you can. Let’s take a look at how much car insurance costs and what you can do to get the best price.
Average national insurance rates
According to Nerd Wallet, the average annual rate for insurance in the U.S. is $2,148. That cost accounts for a good driver with a solid credit background. Poor credit increases that average rate to $3,455, and having an at-fault accident with good credit pushes the cost to $3,164. Drivers with a DUI paid the most, at an average of $3,933 annually.
Those costs are for full-coverage insurance. Drivers wanting minimum coverage, sometimes called liability insurance, pay much less. A driver with good credit pays an average of $685 for minimum coverage, while those with poor credit pay $1,118. A DUI pushes the cost of minimum coverage to $1,403.
Where is insurance the cheapest?
Nerd Wallet found that Maine is the cheapest state for car insurance, with an average annual rate of $1,323. Idaho and Vermont were the other two cheapest states for insurance. Florida is the most expensive state to get coverage, with a $3,605 average insurance cost. The cheapest minimum coverage policies can be found in Wyoming, while Rhode Island drivers pay the most for minimum coverage.
Which companies have the cheapest insurance?
USAA offers the cheapest insurance coverage, but it is only available to current and former military members. State Farm is the next most affordable option, and it’s available to everyone. Allstate, Farmers, and Progressive were the three most expensive car insurance companies, with average annual costs of $3,110, $2,807, and $2,075, respectively. Nerd Wallet noted that smaller insurers tended to offer cheaper rates, but they are not all available in all states.
What impacts insurance costs?
Your driving habits are the most significant factor in determining the price you pay for car insurance. How you drive, and the number of infractions you rack up have an outsized impact on your insurance costs. Companies look at your driving record as an indicator of how risky you’ll be as an insurance customer, and the riskier you are, the more you’ll pay for coverage. This is especially true if you have a DUI or similar offense.
At-fault wrecks can make a big difference in insurance costs. Average rates can increase by as much as 60 percent or more if you’re involved in a wreck that is your fault. Drivers in some places, such as Texas and Massachusetts, pay more than that after at-fault accidents, with drivers in MA paying as much as 88 percent more.
The type of coverage you choose has a significant effect on your pricing. Full-coverage insurance is more expensive than liability or minimum coverage because the vehicle is covered in more situations. The same concept applies to insurance add-ons. If your policy includes several add-on coverage features, such as accident forgiveness and other bonuses, you may pay more for the privilege in your monthly policy charges.
Where you live also has a significant effect on your insurance costs. Some areas of the country see more frequent and costlier car accidents, which could raise your insurance rates. Heavily populated states like New York and Florida tend to be more expensive than less populous states like Maine and Indiana.
The driver’s credit score can play a role, depending on the state and company, and lower credit scores can be viewed as riskier. Finally, men tend to pay more for insurance than women, but the balance changes as people age. Male drivers over 50 pay slightly less on average than women in the same age group.
Insurance discounts
Many insurance companies offer discount programs that can drastically lower the cost of coverage. Military, teacher, and similar discounts are common, but there are often programs for good students, safe drivers, multiple policyholders, holders of other insurance products from the same company (home/life insurance, etc.), and more. You may also get a discount if you pay your policy fees up front or in advance. Some insurers offer discounts for owners of vehicles with advanced safety features and other tech, so it’s essential to check for all the deals available to you.