Car Insurance Rates in 2021

Fran
Dani Milton
January 22, 2021

Car insurance can be expensive, so most drivers search for bargains when signing up for a policy. They want insurance policies that will provide them with maximum coverage at a price point that fits their budget.

Recently, several leading financial publications studied insurance premiums across America. They researched which companies provided the most affordable rates for each driver profile. Their editorial boards came to several surprising conclusions.

In this article, you'll learn about the average price of car insurance in the nation and which coverage is the best choice for you.

Basic Insurance Coverages

Before you learn which insurance companies offer the cheapest rates, here are a few basics about car insurance. Drivers must maintain a minimum level of liability coverage on the road. The Insurance Information Institute says there are two types of liability coverage include:

Bodily Injury: This insurance covers the medical costs related to another person’s injuries when the policyholder is at fault.

Property Damage: It covers damages that an at-fault driver causes to another person’s property.

Every state in the U.S. requires liability coverage except New Hampshire and Virginia. In the areas that don’t require this coverage, a person must be able to pay property damage and bodily injuries arising from a car accident. According to Fool.com, liability coverage is still a sensible option, even in states that don’t require it. Lenders may ask you to get the following coverage if you lease or finance your vehicle. These coverages are optional when you have paid for your automobile in full.

Collision: This insurance pays for damages when your vehicle collides with another vehicle or object.

Comprehensive: It pays for accident-related damages from other causes like natural disasters, fires, weather, or falling objects.

Drivers can enhance their insurance policy with the following optional coverages from their insurer:

Uninsured/Underinsured Motorist Insurance – According to a 2015 Insurance Research Council study, 13 percent of motorists are uninsured. The UI/UIM bodily injury coverage reimburses insured people for accident-related injuries caused by a hit-and-run driver with little or no insurance. The property damage version pays for accident-related damages caused by these motorists.

Medical Payments: The coverage pays the healthcare expenses of drivers and their passengers.

Personal Injury Payments: It pays for medical payments, lost wages, and funeral costs.

Excess Medical Payments: It reimburses drivers for medical costs that exceed PIP benefits.

The Average Cost of Auto Insurance

According to U.S. News and World Report, the nation’s nine largest insurers had an average representative car insurance rate of $1,416.

Insurance companies develop their rates using several personalized metrics. They typically price auto premiums based on underwriting and ratings. During the underwriting process, insurers assess an applicant’s risk using weighted algorithms. They base these formulas on each person’s personal information and internal claims data.

Ratings include prices based on the projected claims. These are the costs insurance companies pay when they assume responsibility for potential claims. Premiums fluctuate based on the potential risk to the insurance company. Individuals can lower their premiums by assuming more risk. For instance, you can drop optional coverages. You can also increase your deductible. It is the out-of-pocket costs you must pay before your insurance coverage begins. Factors insurers use to determine auto insurance rates include: State of Residence

  • Age
  • Gender
  • Driving Record and Experience
  • Marital Status
  • Credit History
  • Previous Insurance Coverage
  • Vehicle Type, Use, and Mileage

According to Bankrate.com, the insurance average car insurance premiums for the top carriers were:

Allstate:

Full Coverage: $1,920

Minimum Coverage: $570

Amica:

Full Coverage: $1,318

Minimum Coverage: $368

GEICO:

Full Coverage: $1,325

Minimum: $363

Erie

Full Coverage: $1,207

Minimum: $360

Farmers

Full Coverage: $1,912

Minimum: $650

MetLife

Full Coverage: $2,237

Minimum: $756

Nationwide

Full Coverage: $1,475

Minimum: $531

State Farm

Full Coverage: $1,422

Minimum: $472

USAA

Full Coverage: $1,252

Minimum: $351

Which Insurance Company Has the Lowest Car Insurance Rates?

U.S. News and World Report conducted a study that determined which insurance company provided the cheapest car insurance coverage. They came to their decision using a collection of standard driving profiles. Their editors awarded the top five spots to the following companies:

USAA – Their editors awarded USAA the number one spot across every driver profile. According to the publication, its lowest representative rate was $885 per year, which was $300 less than the next cheapest rival in their study.

GEICO – The publication gave the number-two spot to this insurer. It found that it had an annual rate of $1,168. It was more expensive than USAA, but 17 percent cheaper than the national average in their analysis. Their editors found GEICO had the lowest rates for every driver profile, except for individuals with a DUI violation. It stood out for its coverage for 25-year-old drivers.

State Farm – The publication awarded third place to State Farm. Their annual representative rate was $1,234. They found this insurance company is a good option for drivers that have imperfect driving records. Their researchers discovered that State Farm’s rates were lower than the national average for individuals with speeding tickets or accidents. The company had the cheapest rates of all companies for profiles with DUI records.

Travelers – This company had an average insurance premium of $1,267 per year. Its study rates were below average for a range of driver profiles, regardless of age, gender, driving history and credit score.

The publication awarded the final four spots to the following insurers:

6. American Family ($1,391 Premium) - U.S. News and World Report determined this insurance was better for individuals with poor driving records.

7. Farmers ($1,682 Premium) - Editors said the insurer was more expensive than the national average.

8. Nationwide ($1,864 Premium) - It is twice as expensive as USAA. Their researchers found it was more expensive for 25-year-old driver profiles and those with poor driving histories.

9. Allstate ($1,880 Premium) - The most expensive car insurance company. It had the highest rates for drivers 35 and 60 years old. It also penalized individuals with fair or poor credit.

Location Matters When it Comes to Auto Insurance Rates

Insurers use your geographic location to determine how much to charge you for car insurance rates. It can even fluctuate based on your city or neighborhood. For instance, areas with higher population density, like Brooklyn in New York City, may pay higher premiums because of a heightened risk of break-ins and automobile crimes. Manhattan residents pay lower rates because area residents rely on subways and buses for their transportation. Michigan has the highest car insurance rates. Their drivers pay twice the national average for full coverage. Maine residents received the best price for full coverage policies at $935 on average. Places where drivers pay the highest rates for full coverage insurance:

  • Michigan $3,096
  • Louisiana: $2,379
  • Florida: $2,309
  • Kentucky $2,208
  • Rhode Island: $2,103

Areas where residents pay the lowest rates for full coverage auto insurance:

  • Maine: $935
  • North Carolina: $955
  • Virginia: $1,005
  • New Hampshire: $1,037
  • Ohio: $1,047

Iowa drivers paid the lowest for minimum coverage at $304. Michigan residents paid the most for full coverage at $1,745.

Your Age Can Affect Your Premiums

Age is another metric that insurers use to calculate car insurance rates. It can significantly affect the price of your premiums, especially if you are a teen driver. Teenagers pay more costs because data shows they are more reckless. This group also has higher accident rates because of their lack of road experience. As a result, insurers charge them more money.

The average auto insurance cost is higher for young male teen drivers. They pay 114 percent more on average than female drivers. Male drivers between the ages of 20 and 24 pay 8 percent more than female drivers in the same age bracket. Drivers will see their rates drop quickly if they maintain a clean driving record. The average premium for 16-year-old drivers is $6,600 per year. It can drop below $2,500 by the time they turn 20 years old.

Car insurance rates don’t fluctuate much for drivers between the ages of 30 and 60 years old. Once drivers reach their late 60s, age becomes an essential factor again. Insurers charge drivers more money as they age. GEICO and Nationwide offer the best rates to older, married drivers without young dependents. According to Fool.com, the average annual rate for full coverage for each age range is:

  • Teens: $5,023
  • 20s: $1,989
  • 30s: $1,532
  • 40s: $1,474
  • 50s: $1,365
  • 60s: $1,384
  • 70s: $1,611

Your Gender Can Impact Your Insurance

In some states, insurance companies charge younger drivers more money based on their gender. It generally affects young people who are ages 25 and under. Teenage male drivers pay the highest premiums. The gender gap shrinks by the time drivers enter their mid-twenties. According to U.S. News and World Report, 25-year-old male drivers paid an average rate of $1,669 for a six-month premium. Twenty-five-year-old women paid average premiums of $1,593.

The publication found 60-year-old women paid the lowest rates ($1,229), followed by their 60-year-old male counterparts ($1,267). The rates for 35-year-old males and females were $1,370. These rates are not the same in every state. Some states do not allow insurance companies to consider gender when setting their car insurance rates. They include California, Hawaii, Massachusetts, parts of Michigan, Montana, North Carolina, and Pennsylvania. It means that males and female drivers will pay similar car insurance rates in these areas if all other factors are equal.

How Your Driving Record affect Your Insurance Rates in 2021

Drivers who get numerous traffic violations will have their car insurance rates increase quickly. Auto insurance is more expensive for those who have speeding tickets and car accidents compared to those with clean driving records. For instance, if you get a single speeding ticket, your insurance rates can explode. According to U.S. News and World Report, these traffic violations can raise average premiums from $1,416 for those with a clean record to $1,724 with a speeding ticket.

Motorists with marks on their driving record saw the following premium increases:

  • Speeding ticket: 22 percent
  • Accidents: 43 percent
  • Driving under the influence: 75 percent
  • Bad credit: 71 percent

Nationwide charged the highest premiums to drivers with traffic violations. These customers paid $2,263 on average, which is $399 higher than individuals with a clean record. Travelers customers with speeding tickets saw a 36 percent increase in their premiums.

The publication tracked rate increases using the profiles of 25-, 35-, and a 60-year-old male and female drivers who drove an average of 12,000 miles every year. The vehicles used were a 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150. Here are the cheapest car insurance rates for drivers with a speeding ticket.

  • USAA $1,041
  • State Farm: $1,375
  • American Family: $1,497
  • GEICO: $1,510
  • Travelers:$1,721
  • Progressive: $1,803
  • Farmers: $2,099
  • Allstate: $2,212
  • Nationwide: $2,263

How Your Credit History Affects Your Insurance Premiums

Insurance companies use credit scores to determine their rates, although some state jurisdictions have made this illegal. A bad credit score can have as much of a negative impact as a DUI. Statistics show drivers with poor credit scores file more claims with higher expenses than those with good credit.

There is an average of $275 difference in annual premiums for those who have very good credit score (740-799) and those who have great credit (800-850). Companies who offered the best car insurance premiums were Nationwide and GEICO. If person had excellent credit, the difference was $200 less than other insurers. These companies charged drivers with the best credit scores $1,000 per year, or $83 per month. Auto insurance companies charged individuals with Very Good Credit the following 6-month rates:

  • Nationwide: $580
  • Geico: $585
  • Progressive: $659
  • USAA: $673
  • State Farm: $687

Rounding out the top ten were American Family ($733), Travelers ($742), Liberty Mutual ($778), Farmers ($801), and Allstate ($1,055).

The prices for individuals with excellent credit were:

  • Nationwide: $500
  • GEICO: $502
  • Progressive: $526
  • State Farm: $544
  • USAA: $566
  • Travelers: $566

Others in the top ten included American Family ($610), Liberty Mutual ($705), Farmers ($706), and Allstate ($927). According to U.S. News and World Report, the cheapest rates for individuals with bad credit were:

  • USAA: $1,653
  • GEICO: $1,855
  • Travelers: $2,095
  • American Family: $2,277
  • Progressive: $2,308
  • Nationwide: $2,549
  • Farmers: $2,669
  • State Farm: $2,745
  • Allstate: $3,025

How Your Vehicle’s Type, Mileage, and Condition Can Impact Your Rates

Your insurance rates can actually fluctuate depending on the brand and value of your vehicle. For instance, if you purchase an expensive luxury brand, it will cost more to replace or repair your vehicle. The insurance company will charge you higher premiums. You may pay lower premiums if you own an older model vehicle. Your insurer will also charge you more based on your vehicle's safety, theft ratings, and mileage. For example, rates for the Ford F-150 and their base car, the 2015 Honda Civic EX, were the cheapest compared to other base models of top-selling vehicles.

Model:

2019 Ford F-150 XL

Average Annual Insurance Rate: $2,988

MSRP: $28,155

2015 Honda Civic EX

Average Annual Insurance Rate: $2,991

MSRP: N/A

2019 Toyota RAV4 LE

Average Annual Insurance Rate: $3,060

MSRP: $25,650

2019 Mazda MX-5 Miata Club

Average Annual Insurance Rate: $3,131

MSRP: $29,590

2019 Dodge Caravan GT

Average Annual Insurance Rate: $3,163

MSRP: $27,040

2019 Nissan Rogue S

Average Annual Insurance Rate: $3,174

MSRP: $25,020

2019 Kia Niro EX

Average Annual Insurance Rate: $3,278

MSRP: $23,490

2019 Toyota Camry L

Average Annual Insurance Rate: $3,360

MSRP: $24,095

2019 Tesla Model 3

Average Annual Insurance Rate: $4,237

MSRP: $35,000

According to Fool.com, these were the average insurance for automobiles by vehicle type:

  • Hybrid: $2,343
  • Sedan: $2,242
  • SUV: $1,868
  • Truck: $1,741
  • Van: $1,602

Average Price of Auto Insurance for Drivers with DUIs

Insurance companies charge drivers with DUI histories higher rates because they have an increased risk of accidents. These drivers pay around 72 percent more on average for car insurance compared to other drivers with clean records. That comes out to over $1,800 more for coverage annually. North Carolina has the largest increase in insurance rates, with premiums skyrocketing more than 300 percent. The state of Florida penalized these drivers the least. In their state, individuals with DUIs only had a 27 percent increase. If you have a DUI on your record, get several quotes from multiple carriers to help you get the most affordable premium.

North Carolina

Driver (Clean Record): $1,506

Driver (DUI): $6,020

Percentage Increase: 300 percent

Hawaii

Driver (Clean Record): $1,763

Driver (DUI): $5,652

Percentage Increase: 221 percent

California

Driver (Clean Record): $1,817

Driver (DUI): $5,153

Percentage Increase: 184 percent

Michigan

Driver (Clean Record): $9,071

Driver (DUI): $27,120

Percentage Increase: 199 percent

Rhode Island:

Driver (Clean Record): $3,589

Driver (DUI): $7,550

Percentage Increase: 110 percent

Do you have an imperfect driving record that has affected your car insurance rates? If you need affordable car insurance, you can search for one using SmartFinancial. You can fill out our quick form below, and our company will provide you with a list of quotes from local insurance companies and agents within your area. You can compare prices and coverages to find the one that is most affordable for you. Let us do all the heavy lifting for you. SmartFinancial is the quick and simple way to find car insurance. Just answer a few quick questions. Start by entering your zip code below.

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