Before you make the next car insurance policy, it’s very important to understand all the factors that can go into the price you’ll pay for coverage.
Car insurance policies have lots of movable parts, and your premium, or the cost you’ll pay for coverage, is only a small part of them. Insurance is regulated at the state level and auto insurance pricing and laws on required coverage are different in every state.
Insurance companies take into account many factors, including the area and the state where you live, as well as your driving history, age, gender, and the level of coverage you’d like to have.
In the following, we will reveal the biggest factors that will influence the price you’ll pay for coverage, and what you need to take into account when looking at your car insurance options.
Price of car insurance by state
Each state has different regulatе for car insurance. States have their policies and regulated own laws about car insurance coverage, including what factors insurance companies can use to determine rates, how much coverage is required, and how much insurance is responsible for covering.
In some states like New Hampshire, car insurance is not required. In Michigan, car insurance is very expensive because of a no-fault law requiring unlimited coverage for personal injury protection. These, as well as many other regulations, will be big factors in the amount you’ll pay for coverage.
Here’s a list of average car insurance prices for every state. These are average rates reported by The Zebra, Nerdwallet, the National Association of Insurance Commissioners, Bankrate, and ValuePenguin. Here’s what you can expect to pay each year for coverage in every US state.
Price of car insurance by type of coverage
As a general rule that applies in each state, the more a car insurance policy covers, the more it costs.
You will often see these numbers 50/100/50. That means that policy would cover up to $50,000 of injury protection for each person included in an accident, up to $100,000 worth of injuries per accident, and up to $50,000 of property damages per accident.
As these coverage limits go up, so it increases your premium. Each state has a different minimum requirement, making car insurance coverage more expensive in some states than others.
Some policies exceed the minimum protection in one state, offering additional and greater protection. Collision coverage can participate in repairing your car if it’s damaged in an accident, and comprehensive policies can protect it from natural disasters and storms.
But these additional types of coverage will significantly increase your costs. According to Nerdwallet, this additional coverage can further increase your premium by about $1,000 per year.
What’s the difference in the price of car insurance for women and men?
Gender has an impact on car insurance especially in those states that allow insurers to consider it. Аnd from the data available it can be seen those car insurance companies tend to charge women more.
In Austin Texas, car insurance for men was charged $ 1,069 for coverage per year, and for women at $ 1,124 per year for coverage, costing the woman driver 5% more. That held true in other cities and states across the country, including Chicago, Seattle, Columbus, Ohio, and Miami. On average, the woman driver pays more for $172.
But there is a connection between age and gender. Аccording to data obtained from the Zebra, young men tend to pay about 14% more for coverage. The difference in costs for coverage gets smaller as young men approach their mid-20s.
But still, six states Montana, Massachusetts, Hawaii, California, North Carolina, and Pennsylvania don’t allow gender as a factor in premium pricing.
Average premiums for car insurance by age
The height of the price you’ll pay for coverage depends on the years you have when you drive. So, 16-year-old’s coverage will be between $1,700 and $3,000 higher per year, from 21-year-old’s coverage.
To find these ranges, we will use the data from comparison sites CarInsurance.com and ValuePenguin. These two websites provided data for the same driver with the ages changed.
Carinsurance.com’s data have an insurance plan in the low end, calculated as the average state minimum insurance coverage for 10 zip codes in all 50 states, through insurers State Farm, GEICO, Nationwide, Allstate, Progressive, and Farmers.
ValuePenguin’s data chose a 25/50/25 insurance plan in Michigan, California, and New York, a policy that would cover more than the state minimum policy, and is calculated as the average of 20 insurance company’s quotes across three cities in every state.
Remember, when it comes to your quote that it will vary from person to person, regardless of your age. Here’s information on how much coverage could cost at each age.
Auto insurance prices are varying by driver profile and his history
As you read this text, you certainly notice how much information goes into a car insurance quote. But of course, there are many more factors that are also considered:
1. Newer or younger drivers pay much more. New drivers pay for 73% more than a driver with 16 or more years of driving experience, show data obtained from the California Department of Insurance.
2. Drivers with a DUI on their record pay much more. With a DUI on your record, you must pay 63% more for insurance, according to Insurance.com and Insure.com reporting.
3. Drivers who live in urban areas pay much more. Drivers who live in rural areas pay cheaper car insurance, and the same is true at the state level. Insure.com data shows that Maine, Iowa, Wisconsin, and Idaho, have the cheapest car insurance of all states, and that’s because they’re more rural states.
4. Drivers with a previous accident on their records pay much more. Drivers with a previous accident, have a higher premium for car insurance by 30%, according to Insure.com and Insurance.com reporting, based on data from Quadrant Information Services
5. Married drivers pay much more. Car insurance for married drivers is bigger for 42%, according to quotes from the California Department of Insurance.
6. Drivers with poor credit scores pay much more. Consumer Reports compiled rate pricing information from car insurance companies in each state and found that credit scores are the most important factors in premium costs. Driver with poor credit in Michigan will pay about $2,470 more every year, than someone with excellent credit, and $251 more in North Carolina, $444 more in Ohio, and $1,512 more in Texas. Only three states Massachusetts, California, and Hawaii don’t allow credit scores to be factored into car insurance prices.
Other factors that can impact the price of car insurance
There are a few other factors that will contribute to an increase in your premium, including:
1. What class of car you drive. The more expensive the car would be to replace, the insurance will be bigger.
2. Previous insurance coverage. If you’ve had a gap in coverage, it will significantly increase your premium. According to ValuePenguin data, if you have a delay in coverage for more than 30 days meant 29% higher premiums.
3. The number of miles you drive per year. If you don’t drive many miles per year, much less likely to be involved in an accident.
There are many factors that go into car insurance pricing. From the data National Association of Insurance Commissioners can be seen how much car insurance premiums have increased over time. From this graph can be seen how auto insurance prices have increased between 2007 and 2016:
However, the large effect on auto insurance costs is whether you’re shopping around. Every insurance company looks at all these factors mentioned above and appreciates your coverage differently. It is very important to compare what you are offered. Collect more offers from different auto insurance companies and compare them to make sure you’re getting the best deal for you.