How Much Is Car Insurance? The King of all Insurance Questions

Maybe you are a new car owner and you have purchased your new auto insurance policy, or perhaps you have received a renewal notice and your rate went up. You may be asking yourself, “What are the factors that influence my auto rate?” You will want to know how you can keep your rates from increasing and how you can also possibly decrease your premium, but most importantly, “how much is car insurance?”

It’s a fact of life. Prices increase on goods and services, and auto insurance is no different. If you maintain a perfect driving record your entire life, you will still experience incremental increases in your rates. Insurance companies are in business to make a profit. Their costs for goods, services, and payroll increase, too. But let;s have a look on the average price and how you can control it, despite of it’s tendency to grow over time.

How Much is Auto Insurance by State – Average Car Insurance Costs

Car insurance costs vary heavily by several factors: state, city, even zip code, your vehicle type, and of course: your driving records and experience. But also other factors, such as credit score, driving behavior or occupation may be taken into account. We explore these factors in the second part of the article. In order what to expect, having a look at the state average is a good way to go:

Note: All data based on the latest NAIC Report.

Obviously, US citizen will have quite different answers on how much their car insurance is, ranging anywhere from $547 in Iowa up to $1,157 in New Jersey, just depending on the State. But beside of moving, there are several practical measures you can actually do in order to keep bills lower.

How Much is Car Insurance by Age?

Another question of major interest is how auto insurance premiums are “affected” by the age of a policy holder. While there is a strong relationship between rates and age, the correlation boils basically down to your driving record/history and experience as a driver. As young drivers typically don’t have a history, their rates tend to be much higher at the age of 16, 17, and 18 and so on as for those already in their twenties. However, special discounts for students and college students do apply, which can positively affect rates, and there are strategies for new drivers to build a history without owning a vehicle.

Seven Factors You Control And Keep Your Auto Insurance Rates In Check

Slow Down

This may be obvious, but it bears reminding: safe driving pays off. Saving 40 seconds in your commute to work is not worth a speeding ticket for going seven miles over the posted speed limit. That is about all you would gain in a 20-minute average commute. Even if you end up with your pay being docked for being a minute late, will it be as costly as ticket fees and court costs? If you make $12 an hour, you might be docked $3. The cost of your ticket can be in the hundreds, and your next renewal will show an increase of potentially hundreds. Is it worth it when you look at it that way?

Claims

Auto insurance is there if you need it for major damage to your car so that you can get yourself back on the road. However, do not call your insurance company for every ding and dent, particularly if the dings and dents were due to your driving and did not involve another vehicle or person. Not only are you still going to have to pay your deductible each time, you

are going to have “dings” on your claim history that will affect subsequent renewals. Get too many of them and you may knock yourself out of eligibility for a preferred company and have to be rewritten into a high-risk (high cost) policy. If you cause a little dent or ding, find out the cost of repair before considering a claim. If the cost is less than, or close to, your deductible amount, it is not worth a claim.

Students

Keep Good Grades. If you are a young driver and you’ve had a pretty good GPA, chances are you are receiving a “good student” discount. If you aren’t sure, be sure to check. However, if you were getting this discount and your grades start dropping, the next time your insurer asks for proof of your GPA, you may find a big hike in your insurance. This is why it is worth keeping in mind to stick with maintaining your grades in school if you still want to avail of student discounts for your auto insurance.

Take an Accident Prevention Course

Many states will offer a discount if you take a defensive driving course, regardless of your driving history. Even with a clean history a driving course will reduce your rate. If you end up with a ticket, you may want to check if taking a course will expunge the ticket off your driving record. It’s not that hard to find a driving course in your area. If you think your driving needs some improvement enroll yourself in one of these courses. It can help you with your bid in getting your auto insurance rates too.

Keep Credit Report Activity to a Minimum

Most car insurers now base a portion of your premium on your credit report activity. Even if you have an excellent score, increased activity could make your rate go up. That includes opening and closing accounts, any late payments reported, collection agencies being added, and any hits on your credit score. Try to reduce your credit activities and you will notice how easier it is to control the rate of your auto insurance.

Vehicle Choice

Another main contributing factor to your premium is the vehicle you drive. If you buy a brand new, very sporty and expensive convertible coupe, you are going to pay a lot more than if you drive a ten year old sedan and only carry liability. If you are car shopping and you have a tight budget, consider buying a car outright, or an inexpensive car that you can pay off within a year. You only have to carry full coverage when you have a loan. Just imagine how much you will be paying for your auto insurance if you will insist on buying that roadster you’ve been eyeing for some time now not to mention the time it takes to pay off your new vehicle.

Monthly vs. Annual Payments

Another proven way to immediately lower your bill is to raise it on the short term and pay your premium in full for the whole year or bi-annual rather than monthly. Insurance companies typically offer a good discount on full and upfront payments, so at the end of the year you can easily save a good amount of money in premiums. However, this approach will only work if you have enough resources at the ready without other bills piling up.

Wrapping up

So now your question won’t be “How much is car insurance” but rather “What are the factors that influence my auto rate that I can control?”

There are other contributing factors, many of which you have no control, but these seven factors you do have some control over. Please be sure to keep them in mind so that you can keep your rates low, or even drop your rates lower over time. These factors can be tweaked to your advantage that is why many professional drivers are aware of these factors when it comes to renewing or purchasing new auto insurance. You should too as these can help you get lower rates on your car insurance. Last but not least, switching car insurance companies provides another good opportunity to get a better offer for the same coverage. For a quote from up to eight different, major carriers in your area, just try our form at the top of the page.