Average Cost Of Car Insurance

When you are shopping around for the most suitable car insurance policy to purchase, you may have many unanswered questions on your mind. From the average cost of auto insurance in your state to the different types available and whether you really need more comprehensive coverage, it always pays to do your due diligence before making any decision.

In this guide, we share with you everything you need to know about the average cost of car insurance, what can affect these rates as well as some best practices to follow when it comes to getting the most advantageous rates. Read on to find out more!

Main Car Insurance Coverage Types

There are different types of car insurance coverage available on the market, and the one you ultimately get will depend on any requirements your lender may impose on you as well as your individual needs and preferences.

Below is an overview of the main car insurance coverage types:

  • Liability: This is considered a “must-have” type of coverage as it covers the cost of treating another party’s injuries should you be at fault for the accident. It also covers the cost of any property damage sustained during the accident.
  • Collision: This type of coverage covers the cost of vehicular damage in the event that you were to hit another person, vehicle or object.
  • Comprehensive: With comprehensive coverage, damage caused to your vehicle by theft, weather elements and other causes is covered.
  • Full: Full coverage encompasses all three abovementioned aspects: liability, collision and comprehensive. Many lenders make it a requirement for drivers to get full coverage before approving their loans.
  • Personal Injury Protection (PIP) and Medical Payments: These two types of coverage are additional and go towards covering medical bills, lost wages and even funeral expenses. Although most drivers do not typically opt to include these, you may choose to do so for peace of mind.

Understanding the Average Costs of Auto Insurance Policies

It can be hard to pinpoint a national average cost when it comes to auto insurance policies as this will differ by state. We all know that auto insurance rates are charged according to the level of risk presented by the policyholder, which differs firstly by personal factors such as age, gender and driving history.

In addition, there are a few reasons that the average cost of auto insurance policies take location into account:

  • Accident rates: The number of traffic accidents that occur in each state differs and as a result, you can be more or less likely to get involved in an accident based on your zip code.
  • Vehicle theft rates: If there is a high risk of vehicle theft in your area, naturally you will have to pay more to be covered.
  • State laws and policies: Does your state have a minimum requirement for liability insurance? If so, you may find yourself paying more than residents of other states.

Car Insurance Rates by State

Now that you have a good idea of how location can affect car insurance rates, it’s time to take a look at how much you can expect to pay in each state. Although the national average for a monthly liability premium is $121, remember that taking out full coverage (which includes collision and comprehensive coverage as well) will cost more.

Below are the monthly rates you can expect to pay for liability premiums in:

  • California: $131
  • Florida: $168
  • Hawaii: $69
  • Kansas: $109
  • Massachusetts: $79
  • Michigan: $238
  • New Jersey: $79
  • New York: $96
  • North Carolina: $174
  • Texas: $143
  • Vermont: $110
  • Washington D. C.: $137

Factors Affecting Car Insurance Rates

You may have noticed that when enquiring for a car insurance policy for your teenage child, the offered rate differed from that of your own. Below are some factors that affect car insurance rates and why:

  • Age: Different age groups tend to have different driving behaviors. For instance, you may need to pay a higher premium for a teenage driver as they are new to the road and therefore likelier to be involved in an accident. As your child gets older and maintains a clean record, the premium can go down.
  • Gender: Male drivers pay higher premium rates than female drivers simply because young men are involved in fatal accidents at a higher rate. The rates paid by men and women get closer after the age of 30, but never closes up fully.
  • Driving history: If you have a DUI/DWI offense or a long history of driving tickets and/or accidents, you can expect to pay a higher premium. You may also find that your premium goes up after you have been in an accident.


Are there Ways to Lower Car Insurance Rates?

While the average cost of car insurance in your zip code is more or less fixed, there are some best practices you can follow to lower your premium over time. This includes:

  • Maintaining a clean driving and credit record
  • Comparing three or more quotes before deciding on a policy
  • Bundling with different types of insurance, such as homeowners’ insurance
  • Increasing your policy deductible
  • Reducing coverage on older cars
  • … and more!

Car Insurance Cost FAQs

Now that you have most of the information you need about car insurance, let’s wrap up with some answers to your FAQs!

On average, full coverage costs 85% more than just getting a liability premium. Some lenders may require you to take out full coverage before approving a loan – always make sure to clarify this point before finalizing a loan.

As mentioned above, teenage drivers will pay a higher premium than older drivers because of their comparatively little experience behind the wheel. As you get older and maintain a (mostly) clean record, you can expect your premiums to drop!

The short answer is no – auto insurance premiums do not go down after your car is paid off. However, you can opt to reduce the types of coverage you are paying for after paying off your car if you are subject to a state- or lender-minimum requirement.

Shop Around for the Best Rates

Chances are, you will not be paying significantly less than the average cost for car insurance in your state. However, by taking the time to shop around and compare quotes from at least three different providers, you can find a policy and rate that works for you. Always take the time to ask questions and request for more information, comparing policies for both cost and quality. That way, you can be sure of getting the best deal for your needs!