The average cost of car insurance in 2022
According to recent data from the Insurance Information Institute, the average cost of an automobile insurance coverage in the United States is $1,070 annually. Since the cost of insurance does not apply to everyone, it is important to learn what factors can change your premium.
The rate you pay for auto insurance is simply one of several variables. Due to the fact that insurance is a state-level issue, the minimum coverage levels and minimum premiums for automobile insurance vary from state to state. Numerous aspects are considered when determining an individual’s insurance premium, including the state and location in which they reside, the individual’s gender, age, driving history, and desired level of coverage.
To find out what factors affect auto insurance rates and how much the average motorist can expect to pay, The Insider examined data from industry authorities, personal financial journals, and comparison sites. You might expect to pay this much, or that much, for your auto insurance, therefore it’s important to know what goes into determining those numbers.
Keep in mind that the coronavirus epidemic has caused significant alterations in the cost of auto insurance. Because of the virus, some insurance firms are helping those who have been afflicted by it by delaying payments or offering discounts for customers who drive less.
The Cost of Auto Insurance, on Average, per State
Auto insurance requirements and policies vary by state. How much insurance is necessary, what costs insurers are responsible for, and what criteria can be used to set premiums are all matters subject to state regulation.
Automobile insurance is optional in some US states like New Hampshire. The high cost of auto insurance in Michigan can be traced back to the state’s no-fault law, which mandates unlimited PIP coverage. The cost of your insurance plan will be heavily influenced by rules like these.
Rates for car insurance, typically
The more comprehensive a policy is, the more it will cost.
You’ll commonly see quotations stated with numbers and slashes; for example, a 50/100/50 insurance would provide up to $50,000 in injury protection for each individual involved in an accident, up to $100,000 in injuries per incident, and up to $50,000 in property damage per incident, respectively.
A higher deductible or higher coverage limits will result in a higher premium. Due to variations in required coverage amounts from state to state, the cost of auto insurance varies widely across the country.
The protection provided by some plans may even exceed the level required by law in a given state. In the event of an accident, collision insurance can assist pay for repairs, while comprehensive insurance can shield your vehicle from natural catastrophes and other perils. These other forms of insurance will, however, raise your premiums.
Costs of auto insurance, broken down by age and gender
The cost of auto insurance is affected by the driver’s gender in states where this is legal.
However, premiums cannot be based on a person’s gender in the states of California, Hawaii, Massachusetts, Pennsylvania, North Carolina, and Montana.
Car insurance premiums are typically determined by the gender assigned on a person’s driving license, which can be problematic for transgender and nonbinary people. The insurance industry is still working out how to price policies in jurisdictions where X is an option on driver’s licenses, including as Oregon, California, Maine, and soon New York.
The length of time you’ve been behind the wheel will also have an impact on your premium. There is a general decline in auto insurance rates as drivers age. However, this increases the cost of insuring a teenage driver significantly. However, keep in mind that it depends on more than just your age, including things like your driving record.
Insurify has compiled data on how much vehicle insurance costs by age and gender.
The cost of auto insurance varies widely amongst insurers.
The average cost of auto insurance is influenced by factors such as the driver’s driving history and the type of insurance policy they choose. Drivers who have a DWI, accident, or traffic ticket on their record typically pay higher premiums.
Costs from some of the most affordable insurance providers in the United States, as ranked by Insurify:
How do factors such as a person’s age, gender, marital status, and driving record affect the cost of auto insurance
You’re probably beginning to get a sense of the magnitude of the data required to get an accurate auto insurance quotation. There are a plethora of additional considerations:
Costs are higher for newer or younger drivers.
Drivers with less than 16 years of experience cost more than those with more.
It’s more expensive for married motorists.
You’ll pay more for car insurance if you’re married.
Insurers charge more to drivers who have had accidents in the past.
Insurance.com and Insure.com report, using data from Quadrant Information Services, that rates increase by 30% following an accident.
People who have been convicted of driving under the influence must pay a higher premium.
According to data compiled by Insurance.com and Insure.com, the cost of your insurance policy would increase by 63 percent if you have a DUI on your record.
Those who drive and have low credit pay extra.
According to data provided by Consumer Reports from auto insurance providers across the country, credit scores are a major influence in determining monthly premium amounts. To drive a vehicle in Michigan with bad credit will cost you an extra $2,470 per year, while in Ohio it will cost you an extra $444, in Texas it will cost you an extra $1,512, and in North Carolina it will cost you an extra $251. Only in California, Hawaii, and Massachusetts is it illegal to utilize credit history to establish auto insurance rates.
Urban drivers get a higher premium.
More rural areas typically have lower auto insurance premiums, and this trend is mirrored at the state level. The states of Iowa, Idaho, Wisconsin, and Maine have the lowest average vehicle insurance premiums in the country, according to statistics compiled by Insure.com. These states are largely rural, which helps explain the low rates.
There are other variables that may affect the price of auto insurance.
Your premium is also influenced by the following:
How many miles you put on your car each year. The risk of being in an auto accident decreases with the number of annual miles driven.
Tell me about the car you drive. The higher the cost to replace the vehicle, the higher the insurance premium.
coverage that was in place before Your rate can go up if you’ve gone without insurance for a while.
There are numerous components that go into determining the final cost of an auto insurance policy. In addition, it has evolved over time. Premiums for auto insurance have risen dramatically over the years, as shown by data from the National Association of Insurance Commissioners. The following table demonstrates the upward trend in auto insurance premiums from 2007 to 2016:
However, whether or not you shop around for car insurance is the single most important factor. There is no uniformity in premiums because each insurer calculates its own unique formula based on your personal information and other variables. The importance of contrasting the various options available cannot be overstated. In order to ensure that you are obtaining the best rate possible, it is recommended that you obtain quotations from many auto insurance providers and then compare the rates.