Finding affordable car insurance isn’t always simple, especially when you’re unsure what drivers like you typically pay. Rates vary based on several factors, including where you live, your driving history, and the type of coverage you choose. While national averages can provide a helpful starting point, your quote may look different. Below, we explain what impacts the cost of car insurance and how you may be able to save.
Key Takeaways
- Car insurance rates vary widely by state, age, and driving record, among other factors.
- City drivers typically pay more than rural drivers because they’re at a higher risk of accidents or theft.
- Comparing quotes may help lower your premium because no two insurance companies are the same.
How Much Should My Car Insurance Be?
The average car insurance cost depends on the state you live in. According to Nerdwallet’s latest rate analysis, the national annual average for car insurance is $2,285 for full coverage.
This number is based on drivers aged 40, with good credit and clean driving records. Each driver is assumed to carry comprehensive coverage including liability, collision, uninsured and underinsured motorist protection, and any additional state-mandated coverages. However, with similar coverage, location can influence how much their premium will be.
How Much Does Average Car Insurance Cost?
Car insurance costs are not one-size-fits-all. A driver with a clean driving record, good credit, and continuous coverage will typically pay less than someone with multiple tickets, poor credit, or lapses in their car insurance coverage. There are also multiple factors that could contribute to your rates that have nothing to do with your record such as age, location, and SR-22 requirement.
Car Insurance by Age or Gender
Drivers under the age of twenty-five can usually expect to pay more for car insurance than older motorists. Additionally, young males often pay more than young females. However, in certain places older female drivers may end up paying more for insurance than their male counterparts. That said, there are multiple states that don’t allow gender-based pricing.
Premiums Fluctuate by Zip Code
In some states, your zip code may play a role in how much you pay for car insurance. If you live in an urban area with a lot of vehicles and a considerable number of accidents, you’ll probably pay more than those who live in a rural area with little traffic. Weather and poor road conditions can also impact costs.
Insurance Costs are Affected by SR-22
Drivers required to file SR-22 forms—or the equivalent—with their state’s Department of Motor Vehicles are going to pay more in car insurance. Filing an SR-22 form itself typically does not cost much, but it indicates that the driver likely committed some form of driving violation. This may include DUI, at-fault accidents, driving without a license or insurance, or a lot of traffic tickets in a relatively short amount of time.
Types of Car Insurance Required
Every state requires a minimum amount of property damage liability coverage, and many states require a minimum amount of bodily injury liability coverage. Choosing the minimum amount of bodily injury and property damage liability coverage required by law will usually cost less each month, but lower limits may leave you exposed if you are involved in a serious crash and are found liable for injuries or damages where medical or physical damage costs exceed the state minimum requirements. The injured parties may take legal action to recover medical costs and property damages that exceed the state minimum requirements.
If you lease or finance your car, your lender will likely require collision and comprehensive coverage in addition to liability. If you own your car, those coverages are optional, but without them you may be facing a financial loss in the case of an accident which could leave you responsible for paying damages out of pocket.
Certain states also require uninsured or underinsured motorist coverage, which protects you if you’re hit by a driver who has no insurance or not enough coverage. This requirement can increase rates for everyone, but it can also offer valuable protection.
Understanding How Rates are Set
Car insurance companies use a range of factors to determine your premium, including:
- Annual mileage
- Marital status
- Vehicle type
- Credit score
Rates may also vary depending on whether the car is a foreign or domestic vehicle, its value, and how expensive the vehicle would be to repair or replace. On the other hand, certain features such as an anti-theft system can help you lower your rate.
The amount of weight insurers give to their pricing factors can also vary. For example, poor credit might raise your premium by upwards of 20% with one company, but 35% with another. Other states don’t even allow credit to be considered at all. That’s why it’s essential to compare rates from multiple companies when looking for the best premium.
Fault vs. No-Fault States
How much you’ll have to pay for car insurance also depends on whether you live in a fault or no-fault state. The majority of states operate under a fault, or tort, system for car insurance. This means the at-fault driver is responsible for paying any medical and related expenses. The victim may also receive compensation, often quite substantial, for pain and suffering.
In no-fault states, each driver’s insurance company pays up to a certain amount for medical bills, regardless of who was responsible for the crash, and the injured person generally does not receive damages for pain and suffering. There are also often limitations on the right to sue the at-fault driver. However, under certain conditions like severe injuries or outrageous medical expenses, drivers in no-fault states may sue for their injuries.
The following are all examples of no-fault states:
| – Florida – Hawaii – Kansas – Kentucky – Massachusetts – Michigan – Minnesota – New Jersey | – New York – North Dakota – Pennsylvania – Utah – Delaware – Oregon – Puerto Rico is a no-fault territory |
Car insurance is often more expensive in no-fault states because drivers are required to buy Personal Injury Protection (PIP) coverage, which covers medical expenses up to a certain limit regardless of fault, leading to higher premiums. Note that no-fault coverage generally refers only to injuries and fatalities, not property damage. If you’re in a no-fault state and another driver damages your car, their insurance may still cover repairs.
The General® Can Help
Finding the right car insurance is more than just the price. It’s about finding a partner who has your back. Whether you have the perfect record or a few bumps in the road, The General has been helping drivers, like you, get affordable, reliable coverage for over 60 years.
With flexible payment options, quick online quotes, and coverage you can trust, we make it easy to protect what matters most. See how much you could save today with a free quote from The General.
