Auto insurance is a necessity for any car owner. In the unfortunate event of an accident, it can help cover the costs of damages and injuries. But how much should you expect to pay for this coverage? The answer lies in the average cost of auto insurance, which varies based on several factors.
Factors That Affect Auto Insurance Rates
Auto insurance rates can vary widely based on factors such as:
- Driving history and record
- Type of car being insured
- Location and where the car will be driven
- Age and gender of the driver
- Credit history
- Deductible amount
Each of these factors plays a role in determining how much you will pay for auto insurance. Let’s take a closer look at each one.
Driving History and Record
Your driving history and record can have a big impact on your auto insurance rates. If you have been in an accident in the past or have a history of traffic violations, your rates will likely be higher than someone with a clean record. Insurers use this information to assess the risk of insuring you and adjust your rates accordingly.
In addition to accidents and violations, insurers will also look at how many years you have been driving, how often you drive, and how far you typically drive. These factors all contribute to the overall risk of insuring you.
Type of Car Being Insured
The type of car you drive is another key factor in determining your auto insurance rates. Generally, more expensive cars will cost more to insure than cheaper ones. This is because the cost of repairing or replacing a luxury or high-end vehicle is much higher than that of a basic sedan or hatchback.
In addition to the cost of the car, insurers will also look at its safety features, age, and likelihood of being stolen. Cars with good safety ratings and lower theft rates are generally less expensive to insure.
Location and Where the Car Will Be Driven
Where you live and where you drive your car can also affect your auto insurance rates. If you live in a densely populated urban area with lots of traffic, your rates will likely be higher than if you live in a rural area with less traffic.
Insurers also take into account how often and where you typically drive your car. If you only use your car for commuting to work and back, you may pay less than someone who drives long distances regularly.
Age and Gender of the Driver
Your age and gender can also play a role in determining your auto insurance rates. Younger drivers are generally considered higher risk than older, more experienced drivers. As a result, they may pay more for auto insurance.
Gender can also be a factor, as statistically men are more likely to be involved in accidents than women. However, some states have banned using gender as a factor in calculating insurance rates.
Credit History
Believe it or not, your credit history can also affect your auto insurance rates. Insurers may use your credit score to help determine your overall risk as a driver. If you have a poor credit history or score, you may end up paying more for your insurance.
Deductible Amount
Your deductible amount is the amount you are responsible for paying before your insurance coverage kicks in. Generally, the higher your deductible, the lower your overall insurance rates will be.
However, it’s important to choose a deductible amount that you can actually afford to pay out of pocket in the event of an accident. You don’t want to end up in a situation where you can’t afford to get your car repaired or replaced.
Average Auto Insurance Rates by State
So now that we know what factors can affect auto insurance rates, let’s take a look at some actual numbers. The table below shows the average annual cost of auto insurance by state, according to data from the National Association of Insurance Commissioners (NAIC).
State |
Average Annual Cost |
|---|---|
Alabama |
$735.79 |
Alaska |
$1,031.77 |
Arizona |
$844.52 |
Arkansas |
$773.72 |
California |
$986.75 |
Colorado |
$935.34 |
Connecticut |
$1,227.75 |
Delaware |
$1,321.86 |
District of Columbia |
$1,360.39 |
Florida |
$1,257.13 |
Georgia |
$901.49 |
Hawaii |
$765.34 |
Idaho |
$567.68 |
Illinois |
$884.56 |
Indiana |
$654.12 |
Iowa |
$530.17 |
Kansas |
$723.67 |
Kentucky |
$817.08 |
Louisiana |
$1,405.36 |
Maine |
$633.01 |
Maryland |
$1,014.63 |
Massachusetts |
$1,096.28 |
Michigan |
$2,239.01 |
Minnesota |
$821.26 |
Mississippi |
$749.32 |
Missouri |
$804.50 |
Montana |
$860.52 |
Nebraska |
$612.52 |
Nevada |
$1,103.05 |
New Hampshire |
$732.86 |
New Jersey |
$1,309.90 |
New Mexico |
$717.60 |
New York |
$1,360.66 |
North Carolina |
$665.43 |
North Dakota |
$512.23 |
Ohio |
$692.25 |
Oklahoma |
$870.96 |
Oregon |
$811.76 |
Pennsylvania |
$972.51 |
Rhode Island |
$1,352.99 |
South Carolina |
$907.15 |
South Dakota |
$526.46 |
Tennessee |
$736.71 |
Texas |
$1,025.64 |
Utah |
$749.58 |
Vermont |
$691.98 |
Virginia |
$758.16 |
Washington |
$872.43 |
West Virginia |
$818.58 |
Wisconsin |
$613.42 |
Wyoming |
$673.76 |
Keep in mind that these numbers are just averages, and your actual insurance rates may be higher or lower than what is shown here. It’s always a good idea to shop around and compare rates from multiple insurers to make sure you’re getting the best deal.
FAQs
What is the average cost of auto insurance?
The average cost of auto insurance varies widely based on factors such as driving history, type of car, location, age, and more. According to data from the National Association of Insurance Commissioners (NAIC), the average annual cost of auto insurance in the United States is $935.80.
How can I lower my auto insurance rates?
There are several ways you can lower your auto insurance rates, including:
- Choosing a higher deductible
- Drive less or carpool
- Ask about discounts for good driving, multiple policies, or safety features
- Shop around and compare rates from multiple insurers
What factors affect auto insurance rates?
Auto insurance rates can be affected by factors such as driving history, type of car, location, age, gender, credit history, and deductible amount. Insurers use this information to assess the risk of insuring you and adjust your rates accordingly.
How often should I shop around for new auto insurance?
It’s a good idea to shop around for auto insurance at least once a year to make sure you’re getting the best rates. Life circumstances can change, and you may be able to find a better deal by switching insurers or adjusting your coverage.
Do I need auto insurance if I don’t own a car?
If you don’t own a car but still drive occasionally, you may want to consider non-owner car insurance. This type of policy provides liability coverage when driving a borrowed or rented car, and can help protect you in the event of an accident.
What is liability insurance?
Liability insurance is a type of auto insurance that covers damages or injuries you may cause to others while driving. It is typically required by law in most states, and helps protect you financially in the event of an accident.
Conclusion
Auto insurance rates can be affected by a wide range of factors, from driving history and car type to location and age. Understanding these factors and shopping around for the best rates can help you save money and get the coverage you need to drive with confidence.