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Car insurance policies have lots of moving parts, and your premium, or the cost you’ll pay for coverage, is just one of them. Insurance is regulated at the state level, and laws on required coverage and
pricing differ in every state. Insurance companies take into account many different factors, including the state and area where you live and your gender, age, driving history, and the level of coverage you’d like to have.
Insider compiled data from industry regulators, personal finance publications, and comparison sites to determine which factors affected car insurance costs and what the typical driver can expect to pay. Here are the most significant factors influencing the price you’ll pay for coverage and what to consider when looking at your car insurance options.
Keep in mind that there have been several major changes to car insurance costs during the coronavirus pandemic. Some car insurers offer discounts as Americans drive less and are helping people affected by the virus postpone payments.
Average car insurance cost by state
Every state handles car insurance differently. States regulate their laws and policies about car insurance coverage, including how much coverage is required, how much insurance is responsible for covering, and what factors insurance companies can use to determine rates.
In some states, like New Hampshire, car insurance isn’t required. In Michigan, car insurance is expensive because of a no-fault law requiring unlimited coverage for personal injury protection. Regulations like these will be significant factors in the amount you’ll pay for coverage.
Source: 2019 data from S&P Global Market Intelligence
Average car insurance cost by coverage type
As a general rule, the more a policy covers, the more car insurance costs.
You’ll often see quotes listed with numbers and slashes — a 50/100/50 policy would cover up to $50,000 of injury protection for each person involved in an accident, up to $100,000 worth of injuries per incident, and up to $50,000 of property damages per incident.
As these coverage limits go up, your premium will increase. Every state has a different minimum requirement, making auto insurance coverage more expensive in some states than others.
Some policies go beyond the minimum coverage in a state, offering additional protection. Collision coverage can help repair your car if it’s damaged in an accident, and comprehensive policies can protect it in events like storms and disasters. However, these additional coverage types will increase your costs.
Average car insurance premiums by age and gender
Gender does influence car insurance, at least in states that allow insurers to consider it.
However, six states — California, Hawaii, Massachusetts, Pennsylvania, North Carolina, and Montana — don’t allow gender as a factor in premium pricing.
For transgender and nonbinary individuals, auto insurance pricing is generally calculated by the gender marker indicated on a driver’s license. In states where X is a gender option on driver’s licenses — including Oregon, California, Maine, and soon New York — insurers are still determining how to calculate costs.
The number of years you’ve been driving will also affect the price you’ll pay for coverage. Car insurance costs tend to fall with age. But, that makes insuring a teen driver incredibly expensive. But, it’s also important to remember that it will vary from person to person, regardless of your age based on other factors like your driving history.
Here’s the breakdown of the average car insurance cost across age groups and gender from Insurify.
Average car insurance cost by company
The average car insurance cost can vary by insurance company and accidents on your record. Generally, drivers with a DUI, accidents, or traffic violation on record see higher premiums.
Here are rates from the cheapest car insurance companies in the US, according to Insurify:
How auto insurance prices vary by driver profile and history
By this point, you’re probably starting to see how much information goes into a car insurance quote. There are many more factors that are also considered:
- Younger (or newer) drivers pay more. New drivers are more expensive than a driver with 16 or more years of driving experience.
- Married drivers pay more. When you’re married, auto insurance costs more.
- Drivers with a previous accident on their records pay more. After an accident, premiums jump 30%, according to Insurance.com and Insure.com reporting, based on data from Quadrant Information Services.
- Drivers with a DUI on their record pay more. With a DUI on your record, insurance will cost 63% more, according to Insurance.com and Insure.com reporting.
- Drivers with poor credit scores pay more. Consumer Reports compiled rate pricing information from car insurance companies in every state, and found that credit scores were one of the biggest factors in premium costs. In Michigan, a driver with poor credit will pay about $2,470 more each year than someone with excellent credit — and $444 more in Ohio, $1,512 more in Texas, and $251 more in North Carolina. Three states (California, Hawaii, and Massachussetts) don’t allow credit scores to be factored into car insurance prices.
- Drivers who live in more urban areas pay more. Car insurance is cheaper in zip codes that are more rural, and the same is true at the state level. Insure.com data shows that Iowa, Idaho, Wisconsin, and Maine have the cheapest car insurance of all states, and that’s because they’re more rural states.
Other factors that can impact the cost of car insurance
There are a few other factors that will contribute to your premium, including:
- The amount of miles you drive per year. If you don’t drive many miles per year, you’re less likely to be involved in an accident.
- What type of car you drive. The more expensive the car would be to replace, the more it will cost to insure.
- Previous insurance coverage. If you’ve had a gap in coverage, it could increase your premium.
Car insurance has lots of factors that go into its pricing. And, it’s changed over time. Data from the National Association of Insurance Commissioners shows just how much car insurance premiums have increased over time. The chart below shows how auto insurance prices have increased between 2007 and 2016:
But, the biggest effect on auto insurance costs is whether you’re shopping around. Each insurance company looks at all of these factors and prices your coverage differently as a result. It’s critical to compare what you’re offered. Get quotes from several different auto insurance companies and compare them to make sure you’re getting the best deal for you.