The average annual cost of car insurance in America is just over $950. But knowing that number on its own isn’t a great indication of how much you will be paying. Rates vary significantly. Michigan leads the nation with an average rate over $2,000. Maine, Ohio, and Idaho are all averaging under $950 annually.
Top Car Insurance Companies In Your Area
Calculating Average Annual Car Insurance Cost
There are a lot of factors, both changeable and unchangeable, that go into determining your car insurance rate. Here are some key factors that impact the average cost of car insurance in America:
Gender
Your Age
Your Marital Status
Marriage means thinking for two people—and signals to insurers that you’re less risky than you were in your single days.
Your Location
If you drive around Manhattan, you are a lot more likely to get in an accident than you are if you’re usually sticking to the back country roads of rural Kentucky.
But something less obvious is also at play: if your state mandates certain standards for car insurance that are stricter than others, you’re likely to pay more money. Michigan, for example, requires residents to have unlimited lifetime personal injury protection (PIP) for accident-related medical expenses as a part of their car insurance. It makes premiums in Michigan more expensive than in other states.
If you live in an area where natural disasters are common, this can also cause your rates to rise.
Your Job
If you’re committed to paying less for car insurance, there are several things that you can work on. These things aren’t easy to change in the short-term, but with hard work and persistence, they are not impossible feats.
Your terms for pretty much any financial transaction will be greatly improved if you improve your credit score. A higher credit score means you’re less of a financial risk, but it also makes insurers trust that you’re more responsible in general.
To improve your credit score, you should pay your bills on time, every time, avoid too many checks on your credit score, and use less than 30 percent of your available revolving credit.
Driving History and Driving Habits
This one should be pretty obvious: if you are prone to racking up tickets, you are a riskier driver to insure. Of course, something like a ticket for going 15 miles over the speed limit on the highway is going to impact your rates a lot less than something like driving while intoxicated would—one is, while risky, understandable, and the other makes you a menace to society—and your rates will respond appropriately.
If you have been fined for a speeding ticket, you’ll feel the impact on your premiums. But if you’ve been caught while driving under the influence, you can expect to pay almost double what the average person in your area would pay. Taking a defensive driving course or installing tracking software on your vehicle could help lower your premiums; talk to your insurance agent.
The length of your commute, how often you use your car and for what purpose, and where you park all impact your premiums. If you have a longer commute, you are exposed to the risks of the road for longer, and more frequently, so your premiums will be higher. Carpooling, telecommuting, and taking the train could all save you money in premiums.
Choose a Cheaper Policy
Choose a Less Sexy Vehicle
That super sleek sportscar? It’s not just going to cost you up front and at the pump: driving a hot-rod makes you riskier to insure. If you’re looking to save on insurance, buy a minivan, a sensible sedan, or an SUV. You should also consider buying a used car and installing anti-theft devices.
It’s important to note, though, that sexy to you and sexy to criminals can mean different things—and will both impact your premiums. The humble Honda Accord is super desirable for criminals and one of the most frequently stolen vehicles out there.
Shop Around
Ask About Discounts
Consider Bundling