If you're in the market for your next car insurance policy, it's important to understand all the factors that can go into the price you'll pay for coverage.
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 auto insurance pricing are different in every state. Insurance companies take into account many different factors, including the state and area where you live, as well as your gender, age, driving history, and the level of coverage you'd like to have.
Business Insider compiled data from industry regulators, personal finance publications, and comparison sites to find out which factors affected car insurance costs the most, and what the typical driver can expect to pay. Here are the biggest factors that will influence 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 some big changes to car insurance during the coronavirus pandemic. Now, some car insurers are offering discounts as Americans drive less, and are also helping people affected by the virus postpone payments.
Every state handles car insurance differently. States regulate their own 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 even 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 big factors in the amount you'll pay for coverage.
Business Insider put together a list of average car insurance prices for each state. These rates were determined as an average of rates reported by Nerdwallet, The Zebra, ValuePenguin, Bankrate, and the National Association of Insurance Commissioners. Here's a range of what you can expect to pay each year for coverage in every US state.
|State||Average Annual Car Insurance Premium||Range|
|Alabama||$1,314||$868 - $2,078|
|Alaska||$1,393||$1,028 - $1,502|
|Arizona||$1,291||$973 - $2,699|
|Arkansas||$1,295||$906 - $2,213|
|California||$1,364||$987 - $1,815|
|Colorado||$1,355||$982 - $3,164|
|Connecticut||$1,541||$1,151 - $2,619|
|Delaware||$1,400||$1,241 - $2,513|
|District of Columbia||$1,406||$1,331 - $2,793|
|Florida||$1,341||$1,257 - $3,370|
|Georgia||$1,374||$1,048 - $2,619|
|Hawaii||$1,377||$873 - $1,548|
|Idaho||$1,280||$680 - $1,777|
|Illinois||$1,243||$885 - $2,313|
|Indiana||$1,203||$755 - $1,489|
|Iowa||$1,215||$702 - $1,482|
|Kansas||$1,215||$863 - $2,190|
|Kentucky||$1,313||$939 - $3,418|
|Louisiana||$1,308||$1,405 - $3,525|
|Maine||$1,421||$704 - $2,340|
|Maryland||$1,487||$896 - $2,431|
|Massachusetts||$1,539||$1,129 - $1,866|
|Michigan||$1,207||$1,272 - $8,723|
|Minnesota||$1,268||$875 - $2,693|
|Mississippi||$1,286||$994 - $2,208|
|Missouri||$1,193||$872 - $2,584|
|Montana||$1,261||$864 - $2,525|
|Nebraska||$1,220||$831 - $2,038|
|Nevada||$1,291||$1,103 - $3,190|
|New Hampshire||$1,534||$819 - $2,004|
|New Jersey||$1,553||$1,104 - $3,013|
|New Mexico||$1,243||$938 - $2,194|
|New York||$1,474||$1,352 - $2,752|
|North Carolina||$1,346||$789 - $1,692|
|North Dakota||$1,230||$773 - $1,979|
|Ohio||$1,195||$789 - $1,688|
|Oklahoma||$1,328||$1,005 - $2,659|
|Oregon||$1,304||$905 - $2,205|
|Pennsylvania||$1,452||$971 - $2,018|
|Rhode Island||$1,455||$1,304 - $3,847|
|South Carolina||$1,335||$973 - $2,112|
|South Dakota||$1,199||$767 - $2,338|
|Tennessee||$1,334||$871 - $1,821|
|Texas||$1,391||$1,110 - $2,594|
|Utah||$1,382||$873 - $2,538|
|Vermont||$1,450||$764 - $1,769|
|Virginia||$1,442||$843 - $1,498|
|Washington||$1,359||$918 - $1,691|
|West Virginia||$1,283||$1,026 - $2,131|
|Wisconsin||$1,219||$737 - $1,590|
|Wyoming||$1,301||$847 - $2,118|
Source: Data from ValuePenguin, Bankrate, The Zebra, and the National Association of Insurance Commissioners.
As a general rule, the more a car insurance policy covers, the more it 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. According to Nerdwallet, additional coverage could raise your premium by about $1,000 per year.
Gender does influence car insurance, at least in states that allow insurers to consider it. And from Business Insider's data, car insurance companies tend to charge women more.
Business Insider collected quotes from Allstate and State Farm for basic coverage for male and female drivers with an identical profile in Austin, Texas. When swapping out only the gender, the male profile was quoted $1,069 for coverage per year, while the female profile was quoted $1,124 per year for coverage, costing the woman driver 5% more. That held true in other cities and states across the country, including Seattle, Miami, Chicago, and Columbus, Ohio. On average, the profiles for women were quoted $172 higher.
But, there is a relationship between age and gender. According to data from the Zebra, young men tend to pay about 14% more for coverage. The gap in costs for coverage gets smaller as young men approach their mid-20s.
The number of years you've been driving will affect the price you'll pay for coverage. According to Business Insider's data, a 16-year-old's coverage will be between $1,700 and $3,000 higher per year than the typical 21-year-old's coverage.
To find these ranges, Business Insider gathered rates reported from comparison sites CarInsurance.com and ValuePenguin. Quotes were obtained by these two sites for the same driver with the ages changed. Carinsurance.com's data comes in at the low end, calculated as the average state minimum insurance coverage for 10 zip codes in all 50 states, through insurers Allstate, Farmers, GEICO, Nationwide, Progressive, and State Farm. ValuePenguin's data chose a 25/50/25 insurance plan in California, New York, and Michigan, a policy which would cover more than the state minimum policy, and is calculated as the average of 20 insurance company's quotes across three cities in each state.
When it comes to your quote, remember that it will vary from person to person, regardless of your age. Here's the breakdown of what coverage could cost at each age.
|Age||Typical Car Insurance Costs|
|16||$2,593 - $6,777|
|17||$2,179 - $6,225|
|18||$1,870 - $5,473|
|19||$1,260 - 4,163|
|20||$1,102 - $3,816|
|21||$875 - $3,057|
|25||$608 - $2,184|
|35||$552 - $1,907|
|45||$525 - $1,816|
|55||$494 - $1,690|
|65||$515 - $1,737|
|75||$630 - $2,037|
|85||$778 - $2,416|
The below data is based on 49,928 policyholders with a similar driver profile. This data was provided to Business Insider by Savvy.
|Insurer||Average Monthly Premium|
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 73% more expensive than a driver with 16 or more years of driving experience, according to quotes obtained from the California Department of Insurance.
- Married drivers pay more. When you're married, auto insurance costs 42% more, according to quotes from the California Department of Insurance.
- 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.
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. According to ValuePenguin data, a lapse in coverage for more than 30 days meant 29% higher premiums.
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.
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