- The average cost of car insurance in the U.S. is $1,128 annually or $94 monthly.
- Your gender, location, age, credit history, and driving history will all factor into your premium.
- Shop around and see which insurance company will have the best price for you.
Car insurance provides financial protection after a car accident. Driving uninsured can lead to tens of thousands of dollars in damages and injuries.
A crucial component of your policy is your car insurance rates. Understanding how rates work can help you get the most competitive price for the coverages you need. Policygenius estimates that the average car insurance rate is $1,128 per year or $94 per month
What Are Car Insurance Rates?
Car insurance rates are the cost of your policy's coverage. Although it's often used interchangeably with premium, those two concepts aren't exactly the same. The California Insurance Department puts it this way, "The rates form the building blocks of the premium you eventually get charged and include discounts for some risks and additional charges for other risks." Basically, insurers use rates to calculate your premiums, while your premium is the actual dollar amount you'll pay.
Knowing car insurance rates and how they affect premiums is key to finding a policy that fits your budget.
Importance of Car Insurance Rates
Understanding your car insurance rates is an important part of managing your insurance policies. It helps you budget for monthly or annual costs, and find ways to lower them.
Factors Affecting Car Insurance Rates
Factors affecting car insurance premiums include your age, gender, credit score, driving record, vehicle type, location, and coverage.
Personal Factors
Personal factors, like age, gender, and credit score, influence car insurance rates. The Insurance Information Institute reports that teen and male drivers get into accidents more frequently, so insurers charge higher rates to drivers in those demographics.
Your insurance-based credit score also affects your rates. Statistically, policyholders with higher credit scores file fewer claims, leading to better policy rates. The table below illustrates car insurance premiums by age and gender based on data from Policygenius.
By Age:
| Age | Yearly Cost |
| 16 | $6,779 |
| 17 | $5,868 |
| 18 | $4,931 |
| 19 | $3,822 |
| 21 | $2,708 |
| 25 | $1,929 |
| 30 | $1,706 |
| 35 | $1,654 |
| 45 | $1,583 |
| 55 | $1,463 |
| 60 | $1,449 |
| 65 | $1,494 |
| 70 | $1,585 |
By Gender:
| Driver's Gender | Annual Cost |
| Female | $2,385 |
| Male | $2,574 |
Driving Record
Insurers pay attention to your driving history when calculating your insurance rates. Those with clean driving records have lower insurance rates than those with moving violations, like speeding tickets, at-fault accidents, and DUIs. The frequency and severity of the infraction also impact your premiums. See the table below for the average cost of car insurance based on different driving profiles, according to Insurify.
| Driving Profile | Average monthly cost |
| Clean | $147 |
| One speeding ticket | $224 |
| One at-fault accident | $232 |
| Reckless driving | $248 |
| One DUI | $264 |
Vehicle Type
The type of vehicle you own determines how expensive your insurance premiums will be. The higher the replacement cost of your car, the more you'll have to pay for coverage. The Insurance Information Institute also notes that insurers consider your vehicle's theft rate, engine size, and overall safety record. Take a look at the average annual premium for car insurance based on cars of various makes and models.
| Vehicle | Average Annual Premium |
| Ford F-150 | $1,665 |
| Honda CR-V | $1,673 |
| Toyota Tacoma | $1,714 |
| Ford Escape | $1,735 |
| Subaru Outback | $1,744 |
| Nissan Leaf | $1,955 |
| Honda Accord | $1,990 |
| Chevrolet Bolt EV | $2,015 |
| Tesla Model 3 | $2,855 |
| Tesla Model Y | $2,884 |
Source: Policygenius
Location
Your state and city, even ZIP codes within a city, have a significant impact on your insurance rates. Insurers look at the cost of living in a particular area and risk factors such as weather events, population density, traffic congestion, accident rates, and crime rates. Expect elevated rates if you live in an area with increased living costs (think Los Angeles or New York City).
Similarly, living in regions with increased exposure to various risks, like many urban areas, will lead to higher rates. The table below depicts the average annual car insurance rates by state.
| State | Yearly Cost |
| Alabama | $1,728 |
| Alaska | $1,393 |
| Arizona | $1,600 |
| Arkansas | $1,768 |
| California | $1,837 |
| Colorado | $1,852 |
| Connecticut | $1,856 |
| Delaware | $2,144 |
| District of Columbia | $1,802 |
| Florida | $2,794 |
| Georgia | $1,625 |
| Hawaii | $1,208 |
| Idaho | $1,094 |
| Illinois | $1,332 |
| Indiana | $1,215 |
| Iowa | $1,158 |
| Kansas | $1,532 |
| Kentucky | $2,181 |
| Louisiana | $2,531 |
| Maine | $1,096 |
| Maryland | $1,784 |
| Massachusetts | $1,553 |
| Michigan | $2,425 |
| Minnesota | $1,422 |
| Mississippi | $1,664 |
| Missouri | $1,588 |
| Montana | $1,902 |
| Nebraska | $1,617 |
| Nevada | $2,198 |
| New Hampshire | $1,284 |
| New Jersey | $2,225 |
| New Mexico | $1,460 |
| New York | $2,048 |
| North Carolina | $1,084 |
| North Dakota | $1,405 |
| Ohio | $1,008 |
| Oklahoma | $1,713 |
| Oregon | $1,443 |
| Pennsylvania | $1,672 |
| Rhode Island | $1,830 |
| South Carolina | $2,018 |
| South Dakota | $1,487 |
| Tennessee | $1,329 |
| Texas | $1,818 |
| Utah | $1,555 |
| Vermont | $1,047 |
| Virginia | $1,349 |
| Washington | $1,730 |
| West Virginia | $1,615 |
| Wisconsin | $1,109 |
| Wyoming | $1,394 |
Source: Policygenius
Coverage Options
Insurers offer an array of coverage options to increase your protection against various hazards. The more coverage you have, the higher your premiums will be. For example, a full-coverage policy, which includes comprehensive coverage and collision protection for your vehicle will be more expensive than a liability-only policy, the state-mandated minimum coverage. Take a look at the differences in annual cost of a standard full-coverage policy versus a liability-only policy.
| Coverage type | Average annual premium |
| Liability-only | $617 |
| Full-coverage | $1,638 |
Source: Policygenius
How to Get the Best Car Insurance Rates
Below are a few tips for getting cheap car insurance for the coverage you need.
Comparing Quotes
Comparing quotes using an insurance broker or online comparison calculator is one of the most effective ways to reduce your premiums. Insurance companies calculate different rates, and not shopping around could mean you're not getting the best deal in the market. Consider comparing quotes at each renewal or at least once a year.
You can find wallet-friendly coverage by reviewing our guide to the best cheap car insurance companies.
Bundling Policies
Save money by bundling insurance policies from one company rather than buying them separately. Most insurance providers offer loyalty discounts, with the common bundle including home and auto insurance. But companies may also allow you to bundle with other products, such as pet or renters insurance.
Maintaining a Clean Driving Record
Avoid higher rates by staying accident and violation-free. Moving violations are a red flag to insurers and lead to increased rates. If you have a less-than-perfect record, consider taking an approved driving course to improve your driving. It may also result in a discount.
Utilizing Discounts
When purchasing a policy, companies automatically apply discounts based on your driver profile and history. But it doesn't hurt to ask your insurer if you qualify for more, especially if it's been a while since you've updated your policy. Common discounts include multi-car, student, affiliation, and loyalty discounts, among others.
Adjusting Coverage Levels
Some insurance is better than no insurance. If you can't afford your policy, adjusting your coverage may help with costs. Some ways to do so are by buying mileage-based insurance or opting out of certain optional coverages. You can also switch to a liability-only policy if you're really strapped for cash, but it should be your last resort.
How Car Insurance Rates Are Calculated
Auto insurance companies calculate rates using actuarial data and by conducting a risk assessment. This process ultimately leads to the premium adjustments reflected in the final premium you see on your policy.
Actuarial Data
Actuarial science involves statistical analysis across a large pool of insured individuals or vehicles to predict the likelihood that a certain risk will lead to a claim. For example, insurers may review historical accident and claim frequency by driver age, vehicle type, and location data. This analysis forms the foundation for calculating base rates.
Risk Assessment
Insurers use risk assessment to determine the likelihood that a policyholder files a claim and any financial losses the insurer might incur by insuring the applicant. As opposed to actuarial analysis, risk assessment focuses on individual risks, such as driving history, credit score, and other personal factors. This step personalizes your base rates established from actuarial data.
Premium Adjustments
After calculating individual rates, insurers increase or decrease premiums based on different characteristics, such as coverage limits, endorsements, deductibles, discounts, etc. Insurers also make periodic adjustments according to external factors like inflation and market conditions. These adjustments ensure that the premium remains accurate and fair over time.
Regional Differences in Car Insurance Rates
As mentioned, location has a major impact on your auto insurance rates. Below are several reasons why:
State Regulations
Several states mandate drivers to carry more coverage than other states, which can increase your rates. For example, drivers in no-fault states must carry their own medical benefits, either in the form of personal injury protection or medical payment coverage.
Urban vs. Rural Rates
Insurance companies tend to charge different rates for policyholders in urban and rural areas. Drivers in urban regions face increased exposure to various risk factors, such as accidents and crime, so they will likely see higher rates on their policies.
Average Car Insurance Rates FAQ
What factors influence car insurance rates the most?
Factors that influence rates the most include age and gender, driving history, location, vehicle type, and the coverages you choose.
How can I lower my car insurance rates?
Lower your rates by maintaining a clean driving record, comparing quotes, bundling policies, and utilizing available discounts.
Why do car insurance rates vary by location?
Rates vary by location due to differences in state regulations, local accident rates, crime rates, and other regional risk factors.
Does my credit score affect my car insurance rates?
Your credit score will affect your rates in many states. Insurers use your credit-based insurance score to determine how likely you are to file a claim. Those with good to excellent credit histories tend to see reduced car insurance rates than those with poor scores.
How often should I shop for new car insurance rates?
You should shop for new car insurance rates at renewal (typically once a year) and whenever you experience significant life changes, like a location change.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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