Auto Insurance Costs: How Much You Can Expect to Pay

Introduction: 

            It’s no secret that you’ll pay more for car insurance if you have any accidents or speeding tickets on your record, or if you live in an area that’s deemed high-risk by insurance companies (generally these are places where the weather can be dangerous, like near the ocean). But how much do all of these factors influence your auto insurance costs? Check out this article to learn about the average cost of auto insurance and how it varies based on your location and driving history.

1- State-by-State Average Premiums

1.1: Auto Insurance Costs

            First, let’s take a look at some numbers so you can get an idea of how much car insurance costs in your state. According to a recent report from ValuePenguin, Florida has an average annual premium of $1,430 (the lowest), while Michigan residents pay more than twice that ($3,247 per year). Those were two extremes. Averages range from around $1,000 in Montana and Ohio down to about $1,200 in New York and Pennsylvania. If you don’t see your state on that list or have additional questions about auto insurance pricing based on where you live, contact your state department of insurance or local agent. The Office of Consumers Affairs within each individual department is designed specifically for customers seeking quotes or advice on coverage options. In addition, most agents will be happy to help you understand what kind of price ranges you should expect when it comes time to shop for auto insurance in your area. What factors influence auto insurance prices? As with any industry, competition among insurers leads to lower prices overall; however, several other key factors will impact your final premium. In addition to location and type of vehicle driven, here are some things we looked at when researching auto insurance rates: Age & Gender – Drivers between ages 16-24 are statistically less likely than older drivers (age 25-50) or women drivers to have accidents but tend to carry higher rates because they are considered riskier prospects.

2- The Impact of Age

            Typically, you'll see a sharp increase in premiums as you age. The reason for that is that older people are more likely to file auto insurance claims than younger people. In fact, an industry report shows that policyholders under 25 are 61 percent less likely to make a claim on their auto insurance policy than those over 50. If you're young and seeking cheap car insurance, it's smart to take measures early in your driving career (like completing a driver's education program) that will help you lower your premiums later on in life. And if you're older and looking for cheaper coverage, look into alternative options like taking a defensive driving course or bundling other types of coverage such as home or renters insurance with your car insurance policy—this can help reduce costs even further.

3- Where you live plays a huge role in car insurance costs

3.1: Auto Insurance Costs

            Where you live, work, or go to school can affect insurance rates. Where you live also has a major effect on how safe your community is, and most companies will base their prices on how often accidents occur there. If your area doesn’t have good safety ratings and many traffic-related injuries or fatalities, expect your rates to be higher. Direct Line Car Insurance uses what it calls a state of performance ratings based on factors such as road quality and traffic levels. The company claims that if you switch from a traditional provider to Direct Line, your state of performance rating could actually save you money by saving you time—for example, by being able to use in-app navigation for driving directions instead of stopping for paper maps (in which case it's too late!).

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4- Some states have specific laws requiring minimum levels of coverage

            In New Jersey, for example, you must have liability insurance (which covers damage you do to another person or their property) that's at least $15,000. In Florida, it's $10,000. However, these are only starting points and can't be used as an accurate representation of what your auto insurance will actually cost you every month. To find out how much car insurance will cost you in your area—and how much coverage you'll need—keep reading. With minimum levels of coverage typically ranging from $15,000 to $25,000 per accident (depending on where you live), comprehensive car insurance is typically something people add to their policy. This type of car insurance is designed to cover any incident where someone else may be at fault—even if they aren't driving your car. This can include vandalism, theft, and damages caused by hitting an animal while driving down the road. The average price of comprehensive car insurance hovers around $160 per year depending on where you live; however, rates vary based on things like age and location so check with your insurer for specifics before making a decision about whether or not it's the right for you.

5- Varying by make and model

5.1: Auto Insurance Costs

            What does your car insurance cost? Each insurance company has its own method for calculating premiums, but most of them use similar metrics like where you live, how long you’ve been driving, and what type of car you drive. For example, if you’re a male driver in your late teens with a Honda Civic who lives in New York City, expect to pay more than someone who is female and owns a Ford Explorer and lives in Atlanta. In general, men pay higher auto insurance premiums than women because they tend to drive more frequently and recklessly. (The same can be said about younger drivers versus older ones.) The good news is that rates typically drop when you hit 25 or 30—the good-driver discount. If you are shopping around for auto insurance, one way to keep costs down is by comparing quotes from different companies using an online tool such as GoCompare Car Insurance or MoneySupermarket Car Insurance. These tools let you compare rates across multiple companies at once so that you can find cheap car insurance quotes without having to spend hours on end researching each company individually. However, it's important to remember that just because a quote seems cheap doesn't mean it's actually good value; some companies may charge low prices but provide poor service.

6- Car owners with many years without an accident get more favorable rates.

            Here’s some good news for safe drivers. Car insurance companies don’t just base rates on a single year of driving history—they look at your whole record over time and make adjustments for those who have a longer-than-average safety track record. Think about it like credit ratings; if you pay all your bills on time, you get more favorable loan terms. Good driving habits can help keep costs down in similar ways, too. Here’s how a few different factors can affect how much auto insurance costs (and how they stack up against other forms of insurance): Your annual mileage: The less you drive each year, obviously, the cheaper it will be to ensure your car or truck. For example, someone who drives 12,000 miles per year pays an average of $1,030 per year for full coverage compared with $2,077 annually for someone who drives 20,000 miles per year. Your deductible: While most people choose to set their deductibles at $500 or $1,000 when they buy their policies (meaning that's how much they'll pay out-of-pocket before their insurer starts chipping in), you can save money by raising that amount as high as possible while still being able to afford any repairs that might come up during a policy period. For example, choosing a deductible of $5,000 instead of $1,000 could cut your premium by about 10 percent.