The amount you must pay for auto insurance varies widely based on a variety of factors. Geography is often the most important factor for safe drivers with decent credit, so it helps to understand the averages for your state. The national average for auto insurance premiums is about $1,621 per year, and there are states with averages that stray far from that figure in both directions. Learn more about how much I should pay for car insurance.
average national costs
The overall national average cost of auto insurance will vary by source. That $1,621 per year figure comes from NerdWallet, while Zebra puts average costs closer to $1,502 per year. Whichever the case, chances are you’ll find yourself paying more than $100 a month for car insurance. in fact, you can expect to pay around $135 a month when you’re in your 40s with plenty of experience, a safe driving record, and good credit.
When calculating national costs, a variety of factors are included. After all, there are several coverage options available from insurance companies, and the average number should reflect the most common type of coverage. in this case, the national cost figures measure policies that include liability, comprehensive, and collision insurance, in addition to state-mandated insurance such as personal injury protection and uninsured motorist coverage.
Buying only the minimum coverage required by law means your premium rates will drop significantly, though the actual costs if you’re ever in an accident can skyrocket. On average, minimum insurance will cost about $676 per year, which is nearly $1,000 less than the national average per year. While these averages can be helpful in getting an idea of insurance costs, your personal factors have the biggest impact on the premium rates you’ll get.
average coverage level
In general, people tend to opt for more coverage than the minimum legally required. the average policy has $50,000/$100,000 of bodily injury coverage and $50,000 of property damage coverage, plus collision and comprehensive insurance with deductibles around $500. Some states, lease agreements, and financing agreements also require differential insurance.
car insurance costs by state
Car insurance premiums and minimum coverage requirements are dictated by your zip code, so the specific state you’re in can have a big impact on your premium. This happens for a variety of reasons, including the state’s accident rate, the number of dense cities in the state, and even the likelihood of hitting a deer. The cheapest state for insurance is Maine as the risk to drivers is very low there. On average, full coverage will not cost even $900 per year. North Carolina and Idaho also stand out for offering affordable comprehensive coverage.
michigan is the most expensive state for insurance and its average premiums far exceed the national average. For full coverage in Michigan, you’ll pay more than $4,000 per year, although there are efforts to lower this rate. louisiana and new york are also notoriously expensive, but neither of these come close to the rates you’ll pay in michigan.
If you’re just looking for the minimum legal coverage, the cheapest state actually changes. Wyoming is the cheapest, with an average annual premium cost of $315. Iowa and South Dakota offer similar affordability. However, opting for the minimum coverage will not save you from Michigan expenses, as it will still cost you more than $2,000. To put that in perspective, the minimum coverage in Michigan is nearly $500 more expensive than the national average for policies that include liability, collision, comprehensive, and state-required insurance.
factors that affect your premiums
The amount you pay for your premiums is greatly affected by a variety of personal factors in addition to your specific location. While any one factor can indicate how much risk you’ll take to insure as a driver, the most important factors are generally the same across all insurance companies, although there are exceptions.
- Driving history: Your driving history is one of the best indicators of how risky a driver you are. Typically, companies will review your driving record for information for about five years. To find out what your driving record looks like, you can request a motor vehicle report from your state driver licensing agency, which is your local DMV.
- extension of coverage: Obviously, more coverage means more costs. The type of coverage you need varies widely depending on the circumstances, but it’s important to keep the generalities in mind. the state-required minimum coverage will always be the most affordable, but if you plan to sell your car at a later date, comprehensive coverage may be a personal necessity.
- Age: Age plays an important role in the amount of your premium. if she is over 25 with a clean record, her premiums will be about the same for decades. however, if you are a teenager or a senior, your rates will be much higher. teenagers are especially expensive to cover, as they pose the greatest risk due to their inexperience.
- Time on the road: The more time you spend on the road, the higher your premiums. This is because the chance of having an accident is increased compared to people who don’t drive as much.
- type of car: If you drive an expensive car, you can expect to pay more for insurance. this is only true if you opt for comprehensive and collision insurance. Since most people plan to sell higher-end models in the future, however, comprehensive and collision insurance may be a necessity.
- Credit Score: Your credit score indicates how trustworthy you are when it comes to repaying loans. Given that measure of responsibility, people with better credit scores will get lower premiums compared to drivers with worse credit scores. Some states, however, prohibit companies from using credit scores as a factor in premium rates.
How much you should pay for auto insurance depends on several factors that work together. Because of this, there is no single answer for all of your auto insurance needs. remember to shop around and compare quotes so you can find the best rates for the coverage your specific driving habits require.