How Much Is Car Insurance?

woman on couch looking at laptop to know how much is car insurance

In the world of insurance, simple questions sometimes have very complex answers. And that is especially true when you ask the question: “How much is car insurance?”

The honest answer is that everybody’s car insurance costs are different. But if you have never had car insurance before, or if you’re shopping for a new policy, it’s important to understand the different costs you can expect to pay.

With that in mind, we put together this guide to car insurance costs. Keep reading to discover the answers to all your questions about auto insurance costs!

Average National Cost

Even though the exact cost of insurance varies from person to person, we can get a good idea of insurance costs by looking at the average amount that drivers pay.

In January of 2020, the National Association of Insurance Commissioners filed a report concerning insurance costs. They found that the average American driver was paying $1,134 per year. In terms of monthly expenses, that breaks down to $94.50 per month.

If you don’t already know, there is more than one type of car insurance. And this average amount is counting how much the average person is paying for a combination of liability, collision, and comprehensive coverage.

Liability, Collision, and Comprehensive Coverage

If you’re wondering what kind of insurance you are required to have, most states only require you to have liability insurance. This is meant to cover the costs (including property damage and bodily damage) caused by you if you are found legally liable for an accident.

Collision coverage helps pay for damages to your vehicle. Even if you were at fault, this type of insurance would help get you back on the road by helping you repair your vehicle.

Finally, comprehensive coverage helps pay for damage caused by unexpected factors such as theft, vandalism, extreme weather, fire, and so on. Depending on the area you live in and the risks your car typically faces in that area, comprehensive coverage may be a wise investment.

Different States, Different Costs

The average car insurance cost we quoted earlier may not be that accurate compared to your own state. And that is because different states have different car insurance costs.

What makes these costs so different? Each state is allowed to define the circumstances that result in insurance discounts (like various safety features you can install in your vehicle). The state also has a major say in things like rate increase approvals and can severely limit or restrict the different variables that affect your insurance premiums.

While the state controls most of these factors, there are some factors affecting cost decided by insurance companies. For example, things like the population density or crime rate of a state can drive rates up. And if many claims are getting filed in the same areas, the premiums in those areas are likely to rise.

The Importance of Different Coverage Types

Previously, we reviewed the different kinds of coverage that go into the average cost of car insurance. However, you may not be aware of the importance of having different types of coverage.

In short, different coverages helps make sure you are covered in different scenarios. For example, liability insurance is a great way to protect others from accidents you may cause. But if that accident damages or even totals your car, then liability insurance alone can do nothing for you.

That’s why many drivers buy collision insurance. No matter who is at fault, this type of insurance can help pay for the damage to your car.

At a glance, comprehensive insurance may seem unnecessary in your area. But it’s great to have “just in case.” Otherwise, surprise scenarios such as flooding caused by steady rain may damage or destroy your vehicle, and you will have no recourse but to pay for repairs or car replacement out of pocket.

The Dangers of Minimum Coverage

Liability is typically the only type of insurance you are required to purchase by the state. If you need insurance and seek to save a few bucks, you may be tempted to get only the minimal amount of coverage.

Generally speaking, though, we recommend against getting only the minimum coverage. In addition to the scenarios we outlined before, you should know that those who survive car accidents quickly discover that the “minimum” is not enough.

Let’s say you have a plan that would pay $10,000 toward bodily injury and you are found liable for a car accident. The other person’s medical costs might exceed that amount, and they may even sue you for more due to their pain and suffering.

This doesn’t mean you have to break the bank buying too much insurance. But buying more than the minimum will help protect you, your car, and pretty much everyone else who was involved!

Factors Affecting Insurance Costs

Finding the average costs of car insurance across the nation or within your state can only tell you so much. That is because many different factors affect the exact insurance premiums you pay each month.

Gender is one of those factors. Men and women pay different amounts, though the variation between these amounts is usually small. But men are generally involved in more accidents and can expect to pay more than their female counterparts.

Age is another major factor. The younger you are, the more of a risk you are in the eyes of the insurance company. But after the age of 25 or so, your insurance costs will become much more affordable (assuming, of course, that you have a clean driving record).

A red auto with car insurance coverage on the road

Speaking of that, your driving record impacts your insurance costs in a big way. Simply put, someone who has been involved in many accidents is always going to pay more than someone who hasn’t.

The actual car you drive is an important factor. Everything from the car’s driving history to how new and expensive it is can affect how much the insurance costs.

Believe it or not, your marital status is a relevant factor. Married people tend to get into fewer accidents, which means that single people typically pay a higher bill than married people.

While this isn’t universal, some insurance carriers base the cost of premiums partially on the driver’s credit rating. If your insurance company does this, then you may wish to explore ways of improving your credit to lower your monthly cost.

Sometimes, how far you typically drive affects the insurance cost. If you have a really big commute or regularly drive long distances for work, this can contribute to a higher cost.

Another factor that we touched on before is the area where you live. If you live in a high-crime area or just an area where many insurance claims are filed each year, you may find yourself paying a higher premium.

And the most obvious factor affecting insurance costs is how much coverage you purchase and your insurance limits. While lots of coverage and high limits are good to have, you are going to have a higher premium from month to month.

Finding Car Insurance Discounts

Still worried about how much your car insurance payment is? In that case, it’s worth taking the time to explore car insurance discounts you may qualify for.

It’s possible to get discounts from your insurance company for being a safe driver. You can also get insurance carrier discounts in some places by bundling different insurance plans together. On a related note, your carrier may offer a discount if you pay annually instead of monthly.

Your insurance company may offer discounts if you install certain safety features in your car (such as anti-theft devices). And such safety features can soon pay for themselves if you get a nice discount each month.

Finally, there may be community discounts available based on your membership in certain fraternities, sororities, or other local or national organizations.

How Filing Affects Premiums

The whole point of having insurance is to protect yourself in the event of an accident. But there is something important you should know about filing insurance claims.

In most cases, filing a claim can increase the cost of your premium. Sometimes, this can be a big jump, with costs rising to 50% higher than they were before.

This is why many drivers are very selective about filing a claim. Someone may decide not to file a claim over a minor “fender bender” because the monthly cost of an increased premium will soon be more than the original damage costs!

Learning More About Insurance

Now you know more about the cost of your car insurance. But do you know where you can find answers to more of your important insurance questions?

InsureOne is here to help you find the very best car insurance for your needs and budget. Start your car insurance quote online, over the phone, or at one of our offices near you today.