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Whether you're buying your first vehicle or recently purchased a new car, protecting your investment and your loved ones is essential.
Finding the right insurance company to suit your needs is often the first step, but you probably have questions about insurance providers, policies and rates. When comparing quotes, you might be wondering what the average cost of car insurance is? It's helpful to understand the variables that can affect your car insurance costs.
According to NerdWallet's rate analysis for 2022, the national average cost of car insurance is $1,630 per year.
That works out to an average car insurance rate of about $136 per month.
These rates apply to full coverage insurance, which includes liability, comprehensive, collision insurance and any additional insurance that the state requires drivers to have. However, your personal car insurance rate will vary depending on a number of factors such as your driving history, location, the coverage you choose and the make and model of your car
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How much is the average car insurance in the US?
The average cost of car insurance in the United States is $1,483 per year, or $124 per month, according to Zebra.1 However, you can pay as much as $211 per month in some states and as much as $80 per month in others. On an annual basis, auto insurance costs generally range between $926 and $2,534 per year per vehicle, but these costs can vary depending on location, provider and coverage chosen. Here are some of the factors that affect the price of car insurance:
State and location
Your geographic location can play a major role in determining your car insurance premium. The state and location where you buy your policy affects how much you pay for car insurance. To find out how much car insurance might cost in a specific location, get a quote for the vehicle you're interested in buying with your home address.
Your zip code usually provides the population density of your location, which insurance companies can use to determine accident rates and likelihood of theft. However, states like California and Michigan are not allowed to use zip codes to determine how much car insurance costs. Some states also require personal injury protection (PIP), and some places take weather and climate into account when determining car insurance costs.
Find out what car insurance is required in your state.
As a driver with reliable auto insurance, your rates will likely fluctuate over time depending on your age. According to the IIHS, teenage drivers are 4 times more likely to cause accidents than drivers over the age of 20. This is generally due to inexperience and unsafe driving habits. Similarly, drivers over 70 are more likely to cause an accident than middle-aged drivers, but less so than teenage drivers.
Based on this data, teenagers and older drivers may pay more when buying car insurance than middle-aged drivers.
Car make and model
Most people assume that new vehicle insurance is usually more expensive than used vehicles, but this is not always the case. New cars can be expensive to insure because they come with new parts and higher trade-in values than older makes and models. But modern vehicles equipped with safety features and tracking capabilities can be cheaper to insure.
The size of the vehicle can also affect the cost of car insurance. Since rates can vary widely based on car make and model, safety features, location, and individual policies, it's important to do your homework and compare rates based on your specific vehicle.
When researching how much car insurance should cost, remember that premiums are mainly based on the risk associated with your vehicle. Drivers with high mileage are considered more likely to get into an accident than drivers with lower mileage. Many insurance providers consider your annual mileage along with other factors such as commuting miles to determine your car insurance costs and whether you qualify for low mileage discounts.
Individuals who are more likely to get into an accident may pay more for car insurance or even have to buy high risk auto insurance.
High-risk auto insurance covers individuals who have an increased risk of accidents, especially people with poor driving records. This car insurance option usually means higher premiums, but rates can be reduced if the driver improves their driving behavior by participating in a safe driving program like RightTrack® or even taking a safe driving course. If a driver's habits do not improve, their monthly car insurance rates will likely increase.
Most insurance companies ask for your annual mileage to help calculate your monthly car insurance costs. If you only use your car for the daily commute, you may pay less than a driver who makes more trips throughout the year.
Credit score and history
Your credit score isn't just important for your car loan, it can also affect how much you pay for car insurance. Although some states prevent insurance companies from using your credit score for auto insurance quotes, some states allow it to be used as a factor in determining your premium.
Research shows that a higher credit score combined with no previous accidents and a history of safe driving can help you get lower insurance rates.
Your driving record helps answer the question: how much should I pay for car insurance? Car insurance providers often pay attention to individual experience and driving records. This recording can demonstrate the driver's habits and how risky they are while driving. Based on these considerations, your insurance company can determine your monthly payment for your vehicle insurance.
If you have a long insurance history but drive carelessly, you are likely to pay more for your car insurance. Violation of driving records is associated with an increased risk of vehicle damage and claims. Conversely, individuals with clean driving records are likely to qualify for cheaper auto insurance rates and may also be eligible for additional discounts or savings that reward safe driving.
Your relationship status can affect how much you pay for car insurance. A married driver can pay up to $96 less per year for car insurance.
Married people are also more likely to own homes and have unions. Combining car insurance with home insurance is an easy way to save on car insurance premiums.
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How much does car insurance cost each month?
The cost of car insurance per month generally ranges between $110 and $130, depending on a variety of factors, including geographic location, car make and model, driving history, and more. However, the cost of car insurance also depends on factors such as gender, marital status and age. Some insurance companies also offer optional coverage that can increase the price you pay.
How much should car insurance cost? Find deals today
Car insurance is essential to protect your loved ones and your property. At Liberty Mutual, we can help you understand the cost of car insurance and help you find a policy that works for you, so you only pay for what you need.
What else affects my car insurance costs?
You may need to consider other factors that can affect your insurance rates. Here are some of them
- More specific location data, such as zip code or city.
- Your occupation in many states.
- Your previous insurance company. If it were a non-standard insurer specializing in high-risk drivers, you could see higher insurance rates with some companies.
- Continuous insurance coverage. Companies charge more for drivers with coverage lapses.
- Annual mileage per car.
- Your marital status. Some insurers believe that married people drive more responsibly, which means that single people – even widows, widowers and divorcees – tend to have higher insurance rates.
- Whether you own your home (and whether you bundle your home insurance with your car).
How much education have you completed?
Other coverage options you choose, such as new car trade-in coverage and gap coverage.
The discounts you are entitled to vary widely from company to company.
Who do you live with? Some companies won't let you exclude people from your policy, such as roommates or adults who don't drive.
How much does car insurance cost in my state?
Here's what our state-by-state analysis of 2022 auto insurance rates for drivers with good credit and no recent accidents shows:
- Idaho is the cheapest state for full auto insurance coverage with an annual average rate of $1,027, followed by Ohio and Vermont.
- Louisiana is the most expensive state for full coverage auto insurance at an average of $2,986 per year, followed by Florida and Nevada.
- Iowa is the cheapest state for minimum required coverage with an annual average car insurance rate of $237, followed by South Dakota and Idaho.
- Florida is the most expensive state for minimum required coverage at an average of $1,085 per year, followed by Nevada and New Jersey.