Understanding Car Insurance Rates

The average car insurance costs in the U.S. are $1,674 per year for full coverage and $565 per year for minimum coverage, according to 2021 data from Bankrate.com. As this is a national average, you may be wondering how much is car insurance for me? Many factors affect the price you end up paying, including where you live in and which car insurance companies operate in your area. On top of that, the car you drive, the number of years you have been driving, whether you’re married and how old you are all affect the price.

Then there’s the level of coverage to take into account. Some policies will cover the minimum, while others will provide full coverage and liability. All of these things affect the cost and should be factored into your research as you shop for auto insurance.

How Much is Car Insurance in your State? 

Different states can have wildly different average car insurance prices, so that’s the first thing to look at. Some of the cheapest states for car insurance include Maine, Ohio, and Idaho, according to Bankrate.com. The average annual prices for full coverage in these states are $965, $1,034 and $1,045 respectively. Compare that to the most expensive states —  Louisiana, Florida, and New York — which have average annual full coverage prices of $2,724, $2,364, and $2,321 respectively. 

This is a huge difference in average price, and it’s the same with the state minimum insurance as well. In fact, as you can see from the table below, the average annual cost for minimum coverage in Florida is $1,101 per year which is still more expensive than the full coverage average in Maine.

Top 3 Cheapest States for Auto Insurance

*Data from Bankrate.com

Top 3 Most Expensive States for Auto Insurance

*Data from Bankrate.com

Average Car Insurance Rate by Provider 

The next thing to look at when asking yourself how much is car insurance per year is to look at the individual providers themselves. While the average cost per state may be high, that doesn’t mean you can’t get it cheaper and make some savings by shopping around.

Each company will have its own prices and criteria for its rates. Data from Bankrate.com shows that some of the most expensive providers include The Hanover, American Independent, and Kemper. Their average annual full coverage premiums are $4,732, $3,458 and $2,928, respectively. Some of the cheapest companies for average annual full coverage rates include Pekin (yearly premium of $774), Safety ($827), and Secura ($897).

Are Average Car Insurance Rates Different for Men and Women?

Overall, the difference in rates between men and women isn’t huge, but it exists. However, it is important to note that several states do not allow gender to be used as a rating factor when pricing car insurance. These states are:

•  California
• Hawaii
• Massachusetts
• Michigan
• Montana
• North Carolina
• Pennsylvania

In these states, gender should not affect car insurance premiums.

*Data from Bankrate.com

Average Car Insurance Costs After a Speeding Ticket

Another thing that can have a big effect on your car insurance price is your driving history. If you have speeding tickets, insurance providers will treat you as higher risk and apply higher insurance premiums to you. 

In general, there is a 23% difference in auto insurance costs if the driver has a speeding ticket on their record. The annual full coverage premium for those with a clean record is an average of $1,674 per year. With a speeding ticket, Bankrate.com’s data show that the cost shoots up to $2,062 per year, which is a $388 difference. 

However, if you can maintain a clean driving record for an extended period of time after getting a speeding ticket, you may be able to get those lower premiums again. This is entirely down to the insurance provider’s decision though. 

*Data from Bankrate.com

Cheapest states for car insurance after a speeding ticket

*Data from Bankrate.com

How Much Will Your Car Insurance Cost After an Accident? 

Having an accident at some point during your driving history can also affect the cost of car insurance. This is particularly the case if the accident is your fault, as it makes you a higher-risk driver. Insurance providers may be more lenient if a long time has passed since the accident, but it’s up to their decision.  

For full coverage insurance, the difference between having a clean driving history and having at least one at-fault accident is a steep 38% on average.

*Data from Bankrate.com

Cheapest states for car insurance after an at-fault accident 

*Data from Bankrate.com

Understanding Car Insurance Premiums

Car insurance premiums will be calculated by taking a number of different factors into account. The factors that affect your premium include things like state of residence, the provider you use and your driving history. 

Some of these things you will be able to change, and some you will have little control over. For example, shopping around for the cheapest insurance provider is a way to reduce your costs, but there’s little you can do about your state of residence or age.

Car Insurance Premiums Factors

• Driving history: When insurance providers calculate premiums, they look at driving history to deem whether you are a risky driver for them to insure or not.
• Coverage Level: The amount of coverage you choose will also have an effect, as there will be big price differences between minimum and full coverage.
• Location: The state and city you reside in will affect premiums, as the average rate per state can differ greatly. 
• Credit Score: Your credit score helps insurance companies check whether you are likely to make insurance payments on time.
• Age & Gender: Premiums can also differ depending on your age and gender. Women often pay more than men, and younger drivers usually pay more as well.
• Marital Status: Married couples often pay lower premiums than unmarried people, as providers see married couples as less of a risk of accidents.
• Vehicle: Some cars may be deemed safer or more resilient than others, while more expensive cars are likely to have higher premiums to cover repairs or replacement.
• Mileage: Generally, the more often you drive, the more likely you may have to make a claim one day.
• Safety features: Those who have safety features on their car may be able to qualify for lower rates of insurance because the provider won’t have to pay out as much after an accident.

Car Insurance Shopping Tips

• Use the same coverage levels for every quote: When comparing insurance premiums across different companies, the best way to get an accurate comparison is to compare the same product with the same details entered. 
• Look out for discounts: Aside from the premiums, some insurance companies will offer special discounts for certain scenarios, like being a good driver.
• Be Honest: While it’s tempting to leave out certain pieces of information, this  can affect your premiums and can even make them more expensive than they should be.

Tips for lowering Car Insurance rates

• Discount options: Some insurance companies will offer discounts, for example, for new customers, students or those in the military. Another way to get a cheaper premium is to contact the company by phone to see if there’s any possibility to reduce the premium.
• Deductibles: The deductibles you are willing to put on your insurance will also have a big effect on the insurance premiums you’re offered. If you can afford to have a high deductible amount, this can reduce your monthly or annual costs.
• Bundling: For homeowners, a great way to reduce your car insurance and home insurance costs is to bundle the two policies at one company. Many companies will offer 10-20% discounts for bundled policies.

How to Lower Your Car Insurance Costs After an Accident

• Always be honest about accidents: If you get into a small accident, you may be tempted to not contact your insurer. However, if the other person ends up suing you and you didn’t tell your provider, they may refuse to honor the policy at all.
• Increase your deductibles: One way to keep the costs down is to increase your deductible after you’ve been in an accident. This can help you mitigate any price hike in your insurance.
• Take a driving class: If the accident was your fault, it may be time to swallow your pride and take a driving class. Having a recent driving class under your belt may help insurers see that you have rectified the mistakes that led to the accident.
• Look for providers with an accident forgiveness clause: Some insurance providers will have a clause that forgives any accidents if a certain amount of time has passed. This requires you to be accident-free for a few years though.

Car Insurance Costs FAQs

Methodology

Reviews.com reviews products, services and companies based on five criteria to help readers understand how companies compare based on similar metrics. As for average pricing, we used Bankrate.com’s data of car insurance rates, based on the profiles of a 40-year male and female. For full coverage, the details used were the following:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually. 

These are sample rates and should only be used for comparative purposes. 

Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Hawaii rates indicate age is not a contributing factor.

Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.

Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket.