How Much Does Car Insurance Cost?

When shopping around for car insurance and gathering quotes, you may wonder: what should my insurance rate be.

Well, there isn’t a one-size-fits-all auto insurance rate. Car insurance rates are as unique as you! They depend on a number of factors like the level of coverage you choose or your driving habits. Keep reading, and we’ll walk you through the ways your rate is calculated, share state-by-state rate averages, and provide tips for lowering your monthly costs and for paying your premium.

Factors That Could Influence Your Car Insurance Rate

First, it’s important to understand the factors car insurance companies use to determine your auto insurance premium.

  • Amount & Type of Coverage: Minimum auto insurance is required by law in most states. After that, the greater your coverage limits and the more types of coverage you have, the greater the cost.
  • The Type of Vehicle: The type of vehicle you drive plays a role in how much your car insurance rate will be.
  • How Much You Drive & Where: If you frequently drive your car long distances or live in a high-risk area, your insurance rate could be higher.
  • Your Demographics: Age, gender (in many states), and marital status all factor in when insurance companies determine your rate.
  • Driving Record: Drivers who have been accident-free for several years will generally pay a lower amount.
  • Credit History: Studies show that drivers who have a poor credit rating are more likely to let their insurance coverage lapse.

Why does the amount you drive affect your rate? Why does your age matter when insurance companies assess risk? Let’s take a look at some of these factors in more detail.

Amount & Type of Coverage

Most states require drivers to purchase a minimum amount of coverage. State minimum car insurance requirements vary by location and could include:

  • Bodily Injury Liability: This coverage protects you financially if a driver listed on your policy is responsible for an accident that injures another person (or people). Bodily Injury Liability will help cover the costs of their medical expenses and pay for your legal services, if necessary.
  • Property Damage Liability: If you (or a driver on your policy) causes an accident that damages another person’s property, Property Damage Liability will kick in. This coverage typically covers damages to the other driver’s car, but it can also include damage to things like a fence, mailbox, home, or storefront.
  • Personal Injury Protection: Also referred to as PIP coverage or no-fault insurance, this coverage helps you and your passengers pay for expenses resulting from an accident, regardless of who is at fault. PIP coverage varies by state, so be sure to check the requirements with your insurance agent.
  • Uninsured Motorist Coverage: Unfortunately, many people on the road are driving uninsured. Thankfully, there’s Uninsured Motorist Coverage! If you’re in an accident caused by an uninsured (or underinsured) driver, or if the driver can’t be identified due to a hit-and-run, this coverage helps pay for your expenses.

In addition to minimum coverage, some drivers determine it’s in their best interest to purchase additional coverage. When you purchase additional coverage (like comprehensive and collision, rental reimbursement, towing, and accidental death), you and your loved ones have more protection, regardless of who is at fault. However, selecting these additional options will increase costs.

The Type of Vehicle

While the color of your car doesn’t factor in determining your monthly rate, the year, make, model, engine size, and body type do. If your car is relatively new and loaded with features, it could be costlier to replace. This increased cost is likely to be reflected in the price of your auto policy. For example, a new sports car will be more expensive to insure than your family’s trusty mini-van because the sports car will probably require more coverage by your lender.

How Much You Drive & Where

The more often you drive your car, the more likely you are to get in an accident, or, at least, that’s how insurance companies see it. If you regularly take long trips or use your car for work, you could be hit with a higher premium because you’re seen as a bigger risk to insure. But insurance companies don’t just evaluate how much you drive. They also take note of where you’re driving. If you live in an urban area with more traffic and higher rates of crime, theft, and vandalism, your insurance rate could be higher than someone living in a rural area.

Your Demographics

Demographic information plays a major role in rate determination, particularly age. Data shows that young drivers are more likely to get into an accident than other age groups, and their combination of reckless decisions and inexperience means insurance companies view newer drivers as a much bigger risk to insure. Meanwhile, an experienced 50-year-old driver would likely have a much lower rate. In addition to age, other factors like gender and marital status can slightly alter your car insurance costs.

Driving Record

At Direct Auto, we work hard to provide you with low rates and affordable options, regardless of your driving history. However, drivers with a clean record over the last few years will generally pay a lower insurance rate, while those with several accidents and traffic violations will typically pay more.

Credit History

If you’ve been wondering, “how much does auto insurance coverage cost,” you might not be thinking about how your credit rating factors in. However, your credit history can play a factor in determining your rate. Data shows that a driver with a poor credit rating is a higher risk for letting his or her insurance coverage lapse. Your credit history is also an effective predictor of the number of claims you’ll file and the total cost of those claims. The lower one’s score, the higher the risk to insure.

Finding an Affordable Car Insurance Plan

You can’t change some of the factors above overnight, but that doesn’t mean you’ll be stuck paying an absurdly high rate. You have options that can save you money today. Here are a few ways you can get a plan you love at a price you can afford.

  • Consider the Coverage You Need: While you definitely want to meet your state’s minimum coverage requirements, you might not want additional coverage depending on your situation. For example, if you have two vehicles and one is much older or not driven very much, you might choose to only meet liability requirements on the older vehicle.
  • Adjust Your Deductible: Typically, a higher deductible means your premium will be lower. This sounds like an enticing way to save you money, but remember, if you get in an accident, you’ll be paying the deductible before your insurance kicks in. So make sure to weigh how much you want to save with how much you could pay upfront for repairs.
  • Look for Discounts: At Direct Auto Insurance, we want everyone to have an affordable car insurance plan, regardless of their history. One of the main ways we keep costs down is by offering a wide range of discounts. When you start evaluating different car insurance plans, check to see if they offer safe driving discounts, good student discounts, mileage discounts, and more.

Average Cost of Car Insurance

How much is good car insurance? How much would full coverage car insurance cost me?

If you’ve been asking these questions, you’re not alone. These are common inquiries among those searching for car insurance, but the answers are not so simple. “Good car insurance” can mean different things to different people. “Full coverage” isn’t actually a type of insurance and is somewhat misleading. Typically, “full coverage” means an auto insurance policy that includes comprehensive and collision coverage. But, a “full coverage” policy might not have uninsured motorist coverage (if you rejected it) or medical expense coverage, or it might include deductibles. In those cases, is the policy really providing “full coverage” for you? So, when talking to your agent, it’s important that you have a specific discussion of what your needs are and the exact coverages that will fit those needs.

But no matter what you’re searching for, we believe it’s a good idea to have a general knowledge of what you might pay for coverage while you’re trying to find the right insurer and plan. The National Association of Insurance Commissioners shares in-depth data of what an average premium might look like depending on the types of coverage you choose. Please note, your specific rate may vary, and prices change from year to year. This most recent data is from 2017.

State

Average Liability Premium (2017)

Average Collision Premium (2017)

Average Comprehensive Premium (2017)

Alabama

$478.68

$366.12

$169.90

Alaska

$561.06

$370.63

$140.50

Arizona

$607.66

$312.95

$204.93

Arkansas

$458.33

$364.07

$216.70

California

$565.70

$453.88

$96.15

Colorado

$639.99

$326.39

$228.32

Connecticut

$743.61

$398.50

$133.91

Delaware

$843.98

$344.34

$133.19

District of Columbia

$744.18

$497.81

$224.28

Florida

$964.28

$343.41

$137.88

Georgia

$735.15

$381.66

$169.68

Hawaii

$468.99

$342.17

$106.97

Idaho

$403.37

$246.22

$130.86

Illinois

$507.40

$336.00

$133.32

Indiana

$432.08

$277.65

$130.71

Iowa

$339.12

$244.39

$211.60

Kansas

$399.96

$280.48

$267.10

Kentucky

$585.99

$300.45

$157.38

Louisiana

$936.94

$468.87

$231.76

Maine

$370.18

$286.22

$108.54

Maryland

$700.58

$393.57

$162.34

Massachusetts

$642.92

$427.17

$145.10

Michigan

$873.73

$462.80

$157.50

Minnesota

$483.93

$257.41

$197.67

Mississippi

$511.45

$365.06

$229.41

Missouri

$492.63

$305.96

$204.08

Montana

$423.03

$278.31

$267.84

Nebraska

$417.32

$263.68

$253.30

Nevada

$798.52

$344.81

$115.46

New Hampshire

$425.84

$319.72

$115.63

New Jersey

$932.43

$403.19

$129.12

New Mexico

$548.33

$304.46

$197.95

New York

$869.13

$437.13

$179.31

North Carolina

$371.51

$333.60

$133.49

North Dakota

$303.66

$263.72

$241.51

Ohio

$438.68

$297.50

$128.46

Oklahoma

$502.71

$343.57

$254.61

Oregon

$677.07

$265.06

$101.80

Pennsylvania

$539.44

$363.42

$162.59

Rhode Island

$869.96

$460.49

$136.58

South Carolina

$645.39

$302.52

$197.24

South Dakota

$327.34

$236.35

$308.71

Tennessee

$456.05

$343.10

$158.13

Texas

$631.22

$430.54

$234.17

Utah

$568.07

$293.62

$122.44

Vermont

$375.02

$324.51

$142.83

Virginia

$468.79

$305.61

$146.00

Washington

$666.72

$297.16

$113.77

West Virginia

$513.12

$345.68

$213.34

Wisconsin

$412.46

$243.52

$148.83

Wyoming

$354.35

$290.18

$291.22

How to Pay Your Car Insurance Premium

Do you pay car insurance monthly or yearly? Is car insurance cheaper if you pay in full? When it comes to paying your premium, you have plenty of options.

Policies are typically six months in duration, but some people choose 12-month or month-to-month policies.

What Is 6-Month Premium Car Insurance

When it comes to making payments for services (from streaming subscriptions to Amazon), we frequently see monthly or yearly installments. Naturally, you might be wondering, “how much is car insurance a month,” but when it comes to car insurance, most quotes are actually the cost of a policy over six months.

Six-month policies can benefit both consumers and insurance companies. A half-year policy gives you, the driver, flexibility. If you’re unsatisfied with your rate or the service you receive, you can leave after a shorter period. If you have some minor traffic violations that are about to fall off your record, a six-month plan could be in your best interest because your rate will be recalculated sooner. Meanwhile, insurance companies are free to raise your rate if you get in any accidents to cover new perceived risks. On the other hand, if you prove you’re a safe driver, the insurance company can reward you with a lower premium, hopefully keeping you as a customer.

Another fact worth noting is that if you pay for your policy upfront, it can lower your overall cost. Many carriers offer a discount if you pay in full and often installment fees will apply if you opt to pay monthly. Paying for 6-month premium car insurance is less of a burden on your wallet than a one-time payment for 12 months of coverage. However, paying upfront is not always possible for everyone, and that’s okay.  Insurance companies offer different options so more people can find a plan that works for them.

Let’s Talk Car Insurance

Still have questions about how much car insurance costs? Get a quote, and we’ll help you find an affordable plan! Call 1-877-GO-DIRECT (1-877-463-4732) or come in for personalized attention from a Direct Auto Insurance agent. We'll help you meet your state's minimum insurance requirements and put together the best car insurance policy for your needs.  
How Much Does Car Insurance Cost?