Average Car Insurance Rates in the U.S.
What Are Average Car Insurance Rates?
If you're a car owner, you understand that auto insurance premiums can be downright frustrating because of the changing car insurance costs. Every six months, auto insurance rises or falls without even an email warning. Many people are curious about how their insurer calculated their new premium rates, and we want to give you all the important information you need to save money.
Little and big life events can cause cataclysmic changes in your car insurance costs. Maybe you've received a speeding ticket in the past six months while racing to pick up your kids from a daycare center before it closed. Perhaps you moved to a new city with a higher population, congested highways, and even faster traffic. You could have even purchased a hot, new sports car with expensive parts and a less-than-perfect safety record.
Do I Need Car Insurance?
Car insurance is a legal necessity in most states. U.S. drivers conduct online research to learn if they're getting a fair shake on their car insurance cost. Others compare insurers to find more affordable rates. Every driver wants to know what is the average cost for auto insurance prices in the nation. In this article, we'll explore the average car insurance costs for U.S. drivers in 2021.
In this article, you'll learn:
- What Is the Average Cost of Car Insurance for 2021
- How Insurers Calculate Your Rates
- States with the Cheapest and Most Expensive Rates
- The Average Car Insurance Rates Based on Age, Gender, and Traffic Violations.
Are you ready to switch your car insurance carriers? If you're in the market for affordable insurance, you can compare coverages using SmartFinancial's comparison engine.
We'll provide you with free insurance quotes from local insurers within your area. You can find the cheapest car insurance companies that match your profile. Just enter your zip code to get started.
What is the U.S. Average Cost of Car Insurance for 2021?
Average car insurance costs can be pricey depending on where you live in the country. Recently, SmartFinancial conducted a detailed study of the average car insurance premiums that carriers charge. We collected data on premiums from U.S. insurance companies to find out the average cost of car insurance.
According to our analysis, we found that the nation's drivers pay for a 12-month premium:
- Average Cost of Car Insurance in the United States: $1,450.92
- Minimum Coverage: $730 (per year)
- Full Coverage: $2,400 (per year)
The average cost of car insurance differs depending on what type of driver you are. Good drivers with experience and a clean record pay less for car insurance premiums than high-risk drivers.
- Alabama - Good drivers without speeding tickets, traffic violations, accidents and DUI convictions pay an average car insurance cost of $108.63 per month, while high-risk drivers pay $123.25.
- Arkansas - Safe drivers pay an average car insurance rate of $110.00 per month, while high-risk drivers spend $129.27 per month.
- Arizona - Good drivers pay an average car insurance rate of $111.51, and high-risk drivers pay $113.99.
How Do Car Carriers Calculate the Price of Premiums?
Insurance companies take into consideration your driving history and other factors when they calculate your premiums. Your rates can change if you get ticketed or have a fender bender near home.
Life events can also impact your rates. For instance, insurers can reduce your premiums when you get married, buy a home, or purchase a new vehicle. How much you commute can also affect your rates.
Car insurance carriers use several factors to determine your insurance premiums. According to the Insurance Information Institute, these include:
- Credit Score – Several industry studies have found that people with low credit scores submit more claims and pose a greater risk on the road. As a result, insurers charge higher rates when individuals have a lower credit score. In some cases, a good driver with a poor credit score can pay higher premiums than a person with a DUI conviction and a good credit score. This is why it's important to pay bills for credit cards on time and get information about which accounts are causing your score to plummet.
- Your Automobile's Make and Model – Car insurers charge cheaper rates depending on the vehicle type. People who own safer cars receive lower rates. These vehicles fare better in crash tests and other safety studies. If you want lower rates, purchase more reliable vehicles.
- Your Current Location – Your zip code is another factor that insurers use to calculate your premiums is your location. Insurance companies consider crime statistics, population density, and the number of accidents in each area to calculate your rates.
- Your Car Insurance Coverage – Your auto insurance limits can also affect your coverage. These include the policy options you choose (such as comprehensive coverage or collision coverage: both are full coverage).
- Age and Gender – Your insurer will look at your age and gender to determine your rates. Insurers usually charge younger people higher rates because of their inexperience. Their rates drop around 25 years old when they have more driving experience. Younger people can lower their rates by using a good student discount. Although men pay higher rates when they are younger, women pay higher premiums than their male counterparts when they're older.
- Driving Record – Your driving history can impact your car coverage costs. If you've had accidents, speeding tickets, or reckless driving citations, your insurance company may hike your rates.
- Your Mileage – You have an increased chance of accidents the more miles you drive. Insurers will charge you more money if you travel long distances to work. Additionally, your parking location can also affect your rates. For instance, you may receive lower rates if you park your car in a secure garage or lot, rather than on the street.
The Average Cost of Liability and Full Insurance Coverage
In this section, we're taking a closer look at your average car insurance costs based on full coverage car insurance and liability coverage.
Minimum Liability Insurance Coverage
Most states require people to obtain minimum coverage before they can drive.
The average cost for a liability-only policy is $730 per year.
Liability coverage shows that a person is financially responsible. It is basic coverage that pays for another party's injuries or damages if you cause an at-fault accident.
There are two components included with liability coverage policies: bodily injury coverage and property damage liability coverage.
- Bodily Injury Liability Coverage (BI) – If you're at fault in an accident, it pays for another person's injuries. Bodily liability coverage also pays for medical expenses such as medical tests, emergency room treatment, hospitalizations and rehabilitative care. This coverage can also help you avoid paying for these expenses out of pocket. The bodily injury liability limit is the maximum amount your insurance company will cover.
- Property Damage Liability Coverage (PD) – This coverage pays for another person's property damage when you're at fault in an accident. It pays for vehicle and other property-related damages. The property damage liability limit is the maximum amount for property damages covered under these auto coverage policies.
- Medical Payments / Personal Injury Protection (Med Pay/PIP) – These two coverages pay for the medical expenses of drivers or their passengers up to the policy's limits for medical costs for the driver regardless of fault. PIP is no-fault medical insurance that covers accident-related insurance expenses.
Full Coverage Policies
Full coverage isn't a specific type of policy. Full coverage is a combination of coverage that includes your state's minimum liability coverage requirements, plus collision coverage and comprehensive insurance.
The average cost of full coverage insurance is $2,400 per year for one car.
If you are financing a car, your lender may require you to carry full coverage including collision coverage and comprehensive coverage.
- Collision Insurance – This coverage helps to repair or replace your vehicle when it is damaged in an accident with another vehicle or object. These include trees, posts, fences or guardrails.
- Comprehensive Coverage – It covers events that aren't covered by collision coverage. These events include fire, theft, vandalism and damages from weather such as a hailstorm, a windstorm, a hurricane or a tornado.
It's important to consider full coverage for a new or expensive car, even if you've paid it off.
Average Car Insurance Rates by State
Average car insurance costs can vary depending on your state and zip code. The Consumer Federation of America conducted a 2018 study to discover how much car insurance companies charge drivers based on their zip code.
The consumer advocacy group discovered that neighbors could pay drastically different rates based on their current zip code. Each driver had the same profile, including identical credit information, driving records and car models.
Their researchers also found insurers charged higher rates to persons living in low-income and urban areas.
For instance, Detroit residents paid 62 percent more for their basic liability coverage than a nearby suburb, Grosse Pointe. In Denver, the organization learned Mile High residents who lived in a low-income area paid higher car insurance premiums than those in a higher-income neighboring community.
Additionally, rates differ drastically depending on your state.
SmartFinancial has gathered a list of average car insurance rates for minimum coverage and full coverage rates from all 50 states. According to our analysis, here are the average monthly premium rates that drivers pay in each state and the District of Columbia.
State Minimum Liability Requirements
|State||Minimum Liability Requirements||Average Minimum Coverage Premium (Per Month)||Average Full Coverage (Per Month, for One Car)|
At SmartFinancial, we care about finding you great coverage at the most affordable insurance premiums. Our free insurance comparison tools can help you find the best car insurance premiums for your budget.
It's easy to get started. Just enter your zip code and answer a few short questions. We'll provide you with a list of insurance quotes from local insurers in your area. Select the coverage and premiums that are right for you.
States with the Cheapest and Most-Expensive Average Auto Insurance Rates
The state you live in can also have a dramatic impact on your car insurance cost.
Cheapest Car Insurance Rates
Some areas provide drivers with coverage at rates below $100 per month for one car. According to SmartFinancial's analysis, the cheapest states for minimum coverage are:
- Cheapest Minimum Coverage – Iowa has the lowest premiums for minimum car insurance. Residents paid an average monthly cost of $36.85.
- Cheapest Full Coverage (Cheapest State) – Maine residents paid the lowest premiums for full coverage car insurance. Their average monthly rate is $73.25.
Most-Expensive Auto Insurance Rates
Several states have monthly average auto insurance premiums that exceed $200 per month. Our analysis found the top three most expensive states for car insurance are Florida ($218.57), Louisiana ($208.89) and New York ($205.64). (These are average rates that change daily.)
- Minimum Coverage (Most Expensive) – Florida has the most expensive minimum auto insurance coverage. Their citizens pay an average monthly rate of $134.20
- Full Coverage (Most Expensive) - Florida also has the highest rates for full coverage car insurance. Sunshine State residents spend an average monthly cost of $226.28
Do you want to find affordable car insurance premiums for your vehicle? SmartFinancial can help you find the best auto insurance rates for your budget. Just enter your zip code, and we'll send you free car insurance quotes from local carriers in your area.
What Are the Average Car Insurance Rates for National Carriers?
Your car insurance carrier can also make a significant difference in the auto insurance costs you pay.
SmartFinancial has a roundup of costs from the eight of the cheapest national carriers. According to our analysis, there were several name-brand insurers we identified as the most affordable in the nation.
|National Carrier||Monthly Premium||Six-Month Premium|
What Are the Average Car Insurance Rates for Smaller Carriers?
National carriers have the advantage of constant advertising and air time. Although their brands are well-known, smaller carriers can also provide similar coverage as the big companies.
Sometimes, these insurers can deliver this auto insurance at lower rates and better customer service. Here are the average car insurance costs from the top 10 cheapest carriers, according to SmartFinancial's data.
|Smaller Carrier||Monthly Premium for One Car||Six-Month Premium|
|American National P&C||$76.65||$459.90|
|North Carolina Farm Bureau||$86.42||$518.52|
|Buckeye Insurance Group||$92.70||$556.20|
|MMG Insurance Company||$97.00||$582.00|
|Utica National Insurance Group||$99.09||$594.54|
|Virginia Farm Bureau||$96.85||$581.10|
Are you searching for an affordable carrier with a lower cost of car insurance? Search for better premiums using an insurance comparison service from SmartFinancial for free auto insurance quotes from more than 200 companies. Just visit the link to get started.
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Average Car Insurance Cost by Credit Score
Car insurance companies consider your credit history and information to calculate your car insurance premiums.
FICO developed credit-based insurance scores to help insurers determine their premiums. These are similar to regular credit scores.
In the states where it's legal, insurers look at your outstanding debt, late payments, credit history, collections and bankruptcies when calculating your rates. They also examine whether you've applied for new lines of credit, installment accounts, and loans.
There are four states that ban the use of credit-based scores to set premiums: California, Hawaii, Massachusetts and Michigan.
These models predict how you will pay bills and repay loans. Insurers use credit-based insurance scores to determine how risky a driver is.
In other states, the lower your credit score is, the higher your premiums will be. There are nine states where car insurance companies charge higher rates. They include Arizona, Connecticut, Michigan, New Hampshire, New Jersey, New York, South Carolina and Utah.
According to the Insurance Information Institute, several industry studies have shown low credit scores correlate with a greater number of insurance claims.
The average cost of car insurance rates for drivers with good credit and poor credit are:
Type of Policy
|Type of Policy||Good Credit||Poor Credit|
|Full Coverage for One Car||$1,555||$2,821|
A good credit score, especially excellent credit, means good auto insurance rates.
What if I Have Bad Credit?
If you have bad credit, you can improve your score by paying off your credit cards, lowering the debt level on your student loans, and making on-time payments. Additionally, search for an insurance company that does not weigh credit so heavily.
SmartFinancial works with over 200 companies, big and small, to find you the right match, even if you have bad credit. Just enter your zip code and we'll provide you with free car insurance quotes from local agents in your area.
The Average Car Insurance Cost Based on Driving Records
Insurers reward good drivers with gold-star coverage. Safe drivers pay lower premiums for car insurance coverage than drivers with a poor record.
For instance, the average car insurance rate for a good driver is $1,600 per year for one car. But a person with a less-than-perfect driving record will pay much more. For instance, after a DUI, a driver could pay an average of $3,120 per year.
In upcoming sections, you'll learn how insurers charge different motorists based on their driving records.
Average Car Insurance Rates Spike After Traffic Violations
Other factors that can affect your average car insurance rates are traffic violations like at-fault accidents and speeding tickets.
After an accident, your car rates may rise 30 to 60 percent on average. In three states, California, Massachusetts and North Carolina, auto insurance rates rise by over 70 percent. Additionally, you will most likely lose your good driver discounts. The severity of the accident determines how much your rates will spike.
For instance, if you pay $570 for six months, your auto insurance premium could increase to $880 if you cause a rear-end collision. If you have accident forgiveness and it's your first accident, you may not see a premium increase.
|Driver Profile||Six-Month Premium||12-Month Premium|
|Good Credit & Speeding Ticket||$680||$1,863|
|Driver (Good Credit & One Accident)||$810||$2,125|
Average Car Insurance Rates with a DUI
According to Centers for Disease Control statistics, 29 people in the United States die every day in car crashes involving drunk and drug-impaired drivers. The agency estimates that drunk drivers cause a death every 50 minutes. Besides the human toll, these crashes also have a financial toll. These crashes cause a total of $44 billion in losses annually.
On average, a driving under the influence (DUI) conviction will raise an average car insurance rate by more than 85 percent. When a driver receives a DUI, it means the driver operated a vehicle while impaired by drugs or alcohol.
Let's look at one example. Let's say you are paying a yearly auto insurance rate of $1,451. Getting a DUI could increase your insurance premium to $2,684.
While rates vary significantly by state, most insurance rates will increase by more than $500 or more after a DUI.
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Average Insurance Rate for Drivers Based on Age
For most teenagers, getting a brand new car offers freedom, enjoyment and independence, but these experiences often come with a high-ticket price.
In the United States, teens and young adults pay the highest car insurance rates, on average. Insurers charge young people higher premiums because they are inexperienced drivers. They also have a greater increased risk of filing claims because of their accident rate.
Several national statistics back up this claim. Teen-related car crashes cost lives and money.
These incidents result in almost $11.8 billion in medical and work losses every year. According to the U.S. Centers for Disease Control, nearly 2,500 teens aged 13-19 died in motor vehicle crashes in 2018. During this same time, emergency room physicians provided treatment for 285,000 teens after car crashes.
|Age Group||Monthly Insurance Premium|
Teen Car Insurance Costs
Teens pay an average of $258.52 each month for car insurance or $4,764 annually.
As young people mature and get more driving experience, their rates drop significantly. By the time an inexperienced driver turns 25 years old, their annual average premium is $160.90 or $1930.80.
One way that young people can get cheaper coverage is to stay on their parent's car insurance policy coverage.
It costs less than a stand-alone coverage. These car insurance policies also reduce costs for teens, but their parents will spend more money on their car insurance costs.
Parents who add a teen to their car insurance policy can expect to pay an additional $187 per month on their auto insurance costs.
SmartFinancial has identified three low-cost insurance with the best stand-alone car insurance policies for teens. Here are six-month premiums for full coverage insurance policies at different companies:
|Insurer||Full Coverage (6 Month Premium for One Car)|
Average Car Insurance Rates by Gender
Some people may be surprised to learn that auto insurance companies consider gender when calculating quotes for your insurance rates. Only seven states prohibit insurers from using this factor in their insurance ratings: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania.
Younger men pay more on average in car insurance than young women by $100 per year.
However, the average car insurance rate for a 40-year-old woman is about $10 a year higher than a man's.
SmartFinancial can help you find cheap car insurance rates for teens.
Average Cost of Car Insurance by Vehicle
Car insurance pricing not only depends on personal characteristics like your age or gender.
It also depends on external factors like the vehicle type and model you have. If you're concerned about controlling your premiums, shop for car models that have features that insurers prefer, like a great safety record.
Insurance companies charge higher premiums when people own the following vehicles.
- Sports Cars – These sleek vehicles race at faster speeds than standard models. These drivers also take unnecessary risks, pushing their limits. As a result, their owners submit higher claims than others. Their owners also receive more traffic infractions.
- Electric and Luxury Cars – Carriers charge more money for electric cars and luxury vehicles. These flashy automobiles have innovative technology that supersedes their competitors. They also have higher repair costs. For instance, a simple battery may cost thousands to replace.
- Most Stolen Vehicles – Expect to pay higher premiums when your car is a popular target of thieves. Insurers charge higher comprehensive coverage which pays out when a car is stolen. The National Insurance Crime Bureau (NICB) says the top-five, most-stolen cars were the Ford F-150, Honda Civic, Chevrolet Silverado, Honda Accord and Toyota Camry.
- Brand New Cars - Your vehicle's age can also affect your auto insurance premiums. Newer models cost more to insure than older models because their parts are more expensive.
Life Events that Can ImpactYour Average Car Insurance Rates
Several life events that can affect the average cost of your car insurance rates. When insurers change your rates, they use to following metrics for your quotes:
Marital Status - If you are married, you will pay less for car insurance. There is a correlation between being married and exhibiting safe driving behavior. Because of this, married people pay less on auto insurance than singles.
Your Annual Mileage Per Vehicle – Your insurance company may charge you more money if you have higher mileage than others. People who drive more are at an increased risk of getting into an accident.
Your Zip Code - Your location can affect the auto insurance premiums you'll pay to a carrier. If you live in a zip code with high accident claims and high auto theft, you will pay more for your car insurance. If you live in a zip code with few accident claims and low crime, you'll spend less money.
Being a Homeowner - Statistics show that people who own homes drive more safely. So let your car insurance company know that you own your home and enjoy savings on your car insurance.
Education – Insurers consider your educational background when determining your car insurance rates. People with bachelor's degrees and higher pay less than drivers with a high school diploma or those without a high school diploma or the equivalent. For instance, a New Yorker with an Associate Degree will pay $210.20 on average, while a person with a bachelor's degree will pay an average of $172.76 for their premiums. A New Yorker with a doctorate will pay an average of $165.89.
Roommates -You can share coverage with a roommate, which could give you both a premium break.
Affiliations - If you have the right affiliation, you may be able to save money on your car insurance. So check your memberships to see if you can save.
Car Safety Ratings - If your car has earned higher safety ratings, you will pay a lower cost on your car insurance. The Insurance Institute for Highway Safety and the National Highway Traffic Safety Administration provides safety rankings for vehicles.
Claims-Free History -Are you a safe driver with no claims in the past three to five years? You may be eligible for a good driver discount from your car insurer.
Pay Your Bill in Full - Insurance companies will give you a discount on your car insurance when you pay your entire bill.
Bundling - Bundle your home coverage together with your auto insurance policy and you'll save money on both your premiums.
Your Profession - Certain insurance companies give discounts based upon your job position. For example, some insurance studies have shown that people of certain professions file fewer accident claims and have fewer tickets and driving citations. For example, medical professionals pay less for car insurance, as do law enforcement personnel. Teachers also get a break on car insurance.
Previous Insurance Company History – Some companies may charge you higher rates if they know you purchased insurance from a nonstandard insurer that serves high-risk drivers.
Continuous Insurance Coverage – Insurers charge people higher rates if they have lapses in coverage.
How Can I Find Cheap Car Insurance?
The best way to save money on your car insurance rates is to shop around. You can compare rates by using an online insurance comparison tool to compare rates.
You don't have to wait to compare rates. You can get free online car insurance quotes from carriers before your premium comes due. Start shopping around whenever you have a major life change like moving to a new city, tying the knot or buying a new home.
The best way to find the cheapest average car insurance quote is to compare rates from companies.
At SmartFinancial, we help streamline the car insurance shopping process with our online comparison engine. Just enter your zip code, and we'll provide you with a list of free insurance quotes from insurance companies within your area. It's simple and only takes two minutes. It can save you almost 40 percent on your car insurance cost.
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