The cost of auto insurance varies significantly across the United States, with the average driver spending around $165 per month on insurance. However, many factors are used to determine how much you pay, from your location and driving record to the age of your vehicle.
What Is the Average Cost of Auto Insurance?
The average cost of full-coverage auto insurance in the United States is about $165 per month. However, many insurance companies charge less if you’re willing to pay up front for the entire year or six months.
What States Have the Highest and Lowest Insurance Rates?
While the national average cost of auto insurance is around $165 each month (about $1,980 per year), some states have much higher or lower averages.
In Maine, the average car insurance rate is under $1000 per year. In Michigan, the average rate is close to $3,800 per year.
States with Low Rates
Many midwestern states, such as Idaho and the Dakotas, have the lowest auto insurance rates. Some of the states with the lowest rates include:
- California
- Idaho
- Illinois
- Indiana
- Iowa
- Maine
- Montana
- North Carolina
- North Dakota
- New Mexico
- Ohio
- Oklahoma
- Tennessee
- South Dakota
- Vermont
- Wisconsin
- Wyoming
You’re likely to pay less than $100 per month for full-coverage auto insurance in these states. Liability-only policies may cost just over $80 per month.
States with Medium Rates
The states with medium rates include:
- Alabama
- Arizona
- Arkansas
- Colorado
- Kansas
- Minnesota
- Mississippi
- Missouri
- Nebraska
- New Hampshire
- Oregon
- Pennsylvania
- Virginia
- Washington
- Texas
- Utah
Liability-only insurance policies average just about $100 per month in these states. The cost of full-coverage insurance is likely to be around the national average of $165 per month.
States with High Rates
The states with the highest rates include:
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Kentucky
- Louisiana
- Maryland
- Massachusetts
- Michigan
- Nevada
- New Jersey
- New York
- Rhode Island
- South Carolina
- West Virginia
The average cost of liability-only insurance in these states is close to $150 per month. Full-coverage insurance may cost $300 or more.
What Factors Influence Auto Insurance Rates?
The state that you live in is just one of many factors that impact your insurance rates. Insurance companies also look at your personal information, vehicle information, and driving history.
Location
Insurance companies may charge higher rates in high crime areas, such as cities and towns with a higher risk of car theft and vandalism. Charging a higher rate helps reduce their liability.
Age
Age is a major factor when it comes to auto insurance rates. Rates are often highest for young drivers and decrease as you age. The reason for this is simple. Young drivers are more likely to be involved in accidents.
One study found that teen drivers are three times as likely to be involved in fatal crashes compared to drivers 20 and up.
Vehicle Type
Vehicle types also significantly affect auto insurance rates. Insurance companies typically charge more to insure older vehicles, expensive vehicles, and vehicles that are often targeted for theft.
For example, certain makes and models of vehicles are more susceptible to theft and vandalism. Insurance companies either charge higher rates or deny applications for these types of vehicles.
Usage and Mileage
Insurance companies want to know more about how you use your vehicle. Some insurance companies charge more if you plan on using your car for more than just commuting and personal use.
For example, drivers who drive for ridesharing services typically need to pay higher rates. You may also get higher rates if you frequently travel long distances. These details put you at greater risk of getting in an accident, resulting in a higher premium.
Driving Record
Insurance companies look at your driving record to assess the risk of approving your policy. You’ll get the best rates if you have a clean driving record.
Speeding tickets, traffic tickets, and accidents can impact your rates and ability to get car insurance. For example, if you’ve gotten several speeding tickets in the past few years, you’re more likely to get a higher insurance premium.
Marital Status and Multi-Car Policies
Your marital status may impact your rates. If you’re married and trying to add a spouse to your policy, you may pay more if your spouse has a poor driving record.
However, you can often save money when adding multiple cars or combining policies. If your spouse has a clean driving record, combining policies simplifies things and may help reduce your premiums.
Continuous Insurance
If you switch or update your insurance, you may get a better rate. Insurance companies occasionally offer discounts to those without gaps in coverage.
Payment Method
Your payment options can influence your premiums in several ways. First, you’ll likely pay more when paying monthly compared to paying every six months or twelve months.
You may also save money when setting up automatic electronic payments. Some insurance companies reward customers for choosing automatic payments, as it reduces the risk of missed or late payments.
Coverage Selection
Coverage details are among the biggest factors that affect your rates. The type of coverage, the limits, and the deductible all influence the cost of your insurance policy.
Minimum-liability coverage without collision or comprehensive coverage is often the cheapest option. It doesn’t cover repairs for your vehicle if you’re involved in an accident.
Collision and comprehensive coverage are often used to cover the cost of repairs or replacing your vehicle after an accident. All types of coverage include limits. A higher limit gives you greater protection but increases your payments.
The deductible is also important, as a higher deductible brings down your costs. However, it also limits the amount the insurance company pays in the event of an accident.
Conclusion
The cost of insurance depends on a wide range of factors, including your vehicle, your driving history, personal details, and the type of insurance that you want.
Out of these details, the deductible, coverage limits, car value, and driving history have the biggest impact. Choosing a higher deductible typically results in a lower payment. Choosing a high coverage amount, getting insurance for an expensive vehicle, and dealing with a bad driving record can drive up your costs.
