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Wednesday, Dec 7, 2022
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Insurance

Your Cost Guide to the Average Car Insurance Premium

Did you know that it is illegal to drive around without insurance in every state in the United States? If you are shopping around for car insurance and are wondering what is the average car insurance premium, you are in the right place. Our guide below will go over what you can expect and factors that can affect your final quote.

Read on to learn more.

Factors That Affect Car Insurance Premiums

Although every insurance carrier has their own way of setting their insurance prices, they all have a few common factors when they are determining your final premium. These common factors include:

  • Age – the younger you are the more you pay because you have less experience than someone that has been driving for a few decades
  • Coverage type – the more coverage that you opt for, the more you can expect to pay
  • Driving record – those that have a clean driving record will pay less because they are seen as less of a liability than someone that has been in at-fault accidents
  • Education – how much further education you have completed
  • How much you drive – those that drive more will pay more because the chances of getting into an accident are higher
  • Location – where you live will affect the price based on the traffic, weather, and crime rate
  • Marital status – some companies they will give married people a cheaper premium because they are considered more responsible than a single person
  • Occupation  – some states will take your current job into consideration
  • Type of car – owner of luxury cars will pay more because those are more expensive to fix or replace in the event of an accident

Remember these are not the only factors that will impact the cost of car insurance, but they are commonly used by every insurance provider out there.

Average Cost by State

Costs of insurance vary from state to state, and the biggest price factor is how many other drivers are on the road. Maine for example is on the cheaper side with their average cost for liability insurance being around $400 where busier states like New York are around $1,000 for liability insurance.

The national average of car insurance is $1,630 per year which is around $136 per month. Of course this varies, things such as a DUI or an accident will greatly impact this number. You can view these DUI insurance implications for more information if you are ever involved in a DUI.

The most expensive state is Louisiana when it comes to full coverage. The average there is $2,986 per year.

Car Insurance Costs Based on Credit

Another factor for insurance prices is your credit score. Good drivers are those that have a clean driving record with no accidents and no DUIs. These are the average costs based on your credit rating:

Good Credit

If you have a full coverage policy with good credit the average cost for the year is $1,630. For those with minimum coverage with good credit the average cost is $561 for the year.

If you are a good driver but have an at-fault accident on your record you can expect to pay around $2,462 per year for full coverage. For those that have minimum coverage then you will pay around $862.00 for the year premium.

Good credit with a recent DUI will cost a driver around $3,139 per year for full coverage. A DUI with good credit and minimum coverage will cost around $1,134 per year.

Poor Credit

For those will full coverage, a good driving record, with poor credit, the average per year is around $2,792. If you opt for minimum coverage with poor credit you will pay around $973 per year as long as you’re a good driver.

Average Rates for Young Drivers

As we mentioned earlier those that are younger with less experience pay more because they are seen as a higher risk. Young drivers are typically between the ages of 16-25 years of age. In some states being under 30 automatically puts you in their young driver category.

The rates for a 20 year old compared to a 35 year old tend to be around $1,700 more per year. The average cost for a 20 year old driver with good credit and a good driver status is around $3,325 for full coverage and $1,191 for minimum coverage.

Young drivers with good credit and an at-fault accident will pay around $4,464 per year for full coverage and around $1,620 for minimum. A young driver with good credit but one DUI can expect to pay around $5,498 for full coverage and $2,064 for minimum coverage.

Young drivers that have bad credit, but a good driving record will pay around $5,683 for full coverage and around $2,023 for minimum coverage.

Tips to Save Money

One thing you can do to lower your policy is to pay it in full. Every insurance company offers some type of discount for drivers that pay their entire premium up front. Another way to save money is to get a policy based on usage.

This works if you don’t drive often because it allows you to pay based on the number of miles you drive per year.

Feeling Like a Pro About Average Car Insurance Premium Costs?

Now that you learned what the cost of the average car insurance premium is, you can start shopping around with a bit more knowledge about insurance rates. These averages give you an idea of what to expect but don’t forget there are always different variables that will affect your final cost.

If our blog post helped you out – there is more where this came from. Keep browsing this section for more guides and tips.

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