The Average Cost of Car Insurance in USA
The average annual cost of car insurance in the US was $ 1,056 in 2018, according to the latest data from the Insurance Information Institute. However, knowing that these statistic won’t necessarily help you figure out how much you will be paying for your own coverage. The rates vary significantly and the are are based on personal details.
To better understand what to pay for auto insurance, it is a good idea to read up on how companies determine their rates. Read on for an overview of the most common determinants and how you can make additional savings.
Calculate the average annual cost of car insurance
There are many factors that play a role in determining your car insurance rate. You can easily change some of these factors, others require work to change, and others are beyond your control. Here are some key factors that affect the average cost of auto insurance in America.
Age : People under the age of 25 are considered high risk drivers due to their age. Youngsters and new drivers are particularly risky. If you are under 25, you can expect higher premiums.
Location : Driving around Manhattan is much more likely to have an accident than if you normally stay on country roads in rural Kentucky. It’s not just traffic that affects regional premium prices. Local rates of vandalism, theft, and natural disasters are also reflected in your premium.
Marital Status : Marriage means thinking for two people, and that tells insurers that you are less risky than you were in your single days . Statistics confirm this, married people have fewer accidents. As a result, married people save on their rates
This is also about something less obvious; If your state mandates certain car insurance standards that are stricter than others, you are likely paying more money. For example, Michigan residents must have Unlimited Lifetime Personal Injury Protection (PIP) for accident-related medical expenses as part of their car insurance. This is one of the reasons Michigan premiums are some of the most expensive in the country.
Note : The most expensive state for auto insurance in 2018 was Louisiana, with an average annual cost of $ 1,545.82. Michigan came in second, followed by the District of Columbia, Florida, and New York. The least expensive state was North Dakota, with an average annual cost of just under $ 686.08.
The second least state was Maine, followed by Iowa, South Dakota, and Idaho. Occupancy – Using your car as an actual taxi or ridesharing will mean paying more for insurance and may have to pay for an entirely different type of insurance. Talk to your company and your insurance agent about how your job can affect your rate.
Driving Habits : The length of your commute, how often you use your car, why you use your car and where you park all will affect your premiums. If you commute long, you will be exposed to the dangers of the road longer. If you drive more often, you will be more exposed to road hazards. Carpooling, telecommuting, and taking public transportation can save you money on premiums.
Driving History : This should be pretty obvious. If you’ve a racking up tickets in the history, you are a riskier driver to insure and you will pay more in premiums. Installing tracking software in your vehicle can help lower your premiums when you have a less than perfect history.
Vehicle type : The super sleek sports car you’ve always wanted? Not only does this cost you the sticker price : driving a valuable car makes it riskier to get insurance. This is because driving a flashy car makes you a target for criminals. Insurance premiums also take into account a car’s overall safety and average cost of repairs . If you want to save on insurance , buy a minivan, a sensible sedan, or SUV. You should also consider buying a used car and installing anti-theft devices.
Caution : It’s not just fancy sports cars that are frequently targeted by thieves. According to the National Insurance Crime Bureau, the most stolen vehicle in 2019 was a Ford Full Size Pickup. A Ford Pickup may not be the car of your dreams, but you will pay higher premiums, anyway.
Credit Score : Your terms for virtually any financial transaction will improve affectedly as you improve your credit score. A higher credit score means you have less financial risk and that you are generally more responsible.
While there is no instant cure for a low score, there are many steps you can take to improve your credit score. Potential steps include building up a history of paying bills on time, avoiding too many checks on your credit, and using less than your available credit.
How to Save on Average Car Insurance Costs
Apart from addressing each of the premium factors individually, there are a few additional tips that you can use to save money on premiums.
Choose a Cheaper Policy : Comprehensive coverage with all the additional benefits will cost you more premiums than simple minimal liability coverage. Remember, you get what you pay for. If you are in an accident, you will probably be glad you didn’t select this as an area to scrimp and save on. However, if you never need to file a claim, you will have pocketed the extra savings with no consequence.
Shop Around : It is practically the golden rule of shopping that you should never get the first offer. You already know that not all levels of coverage are created equal, but until you see what’s available, you will never know whether or not you are getting the best deal for the amount of coverage you want.
Ask About Discounts : Are You a straight-A Student? Active duty in the army? A member of the AAA? These are just some of the qualities that could make you to eligible for a discount on your insurance premium. But here’s the catch: different companies offer different types of incentives. So you should shop around and ask insurance agents about these discounts.
Consider bundling : you can get a discount on different types of insurance from your auto insurance provider, such as: home or rental insurance. Ask an agent what other insurances are available and whether you would get a discount for bundling the coverage.