The cost of insurance premiums depends on a number of factors. Where you live can determine how much you pay for your auto insurance policy because some places are seen as more expensive states than others. Even though some states have higher rates than others, there are ways of finding auto insurance premiums that provide adequate coverage and don’t break the bank.
Insurify can help you look up affordable auto insurance quotes so you can drive with the peace of mind of knowing that you’re covered. The fear of expensive car insurance shouldn’t keep you from being protected on the road. Use our tools to get side-by-side comparisons in minutes, all for free. Getting good coverage on your auto insurance policy shouldn’t cost you an arm and a leg.
Factors That Contribute to the Cost of Car Insurance
There isn’t one set price that every single person pays for a car insurance policy. Every person pays a different price because car insurance companies take each individual’s unique profile into account when figuring out how much to charge. A number of factors go into these calculations to make sure that the cost accurately reflects how risky a driver is.
There are a number of rating factors that car insurance companies use to determine the cost of your premium. Simply put, the less risky your rating factors are, the cheaper your auto insurance policy will be. Some factors are weighted more heavily than others, like whether you have a clean driving record. Alternatively, gender and marital status are considered less.
Here is a list of factors that auto insurance companies use to determine the cost of your policy:
Simply put, the more car accidents, violations, and claims you have on your driving record, the higher your policy will cost. Car insurance companies use your history to calculate how risky of a driver you are, which predicts your future on the road. Reckless driving, tickets, and DUIs all negatively impact your chances at saving.
People might disregard how important their financial health is when calculating something like the cost of an auto insurance policy, but research shows that drivers with poor credit file more claims than drivers with good (or relatively better) credit. Insurance companies typically see “bad credit” as a rating between 300 and 579. “Good credit” is between 580 and 800.
This is a significant rating factor that mostly impacts young drivers, who are new on the road. It is tied to years of driving experience, where the more experience you have on the road, the less likely you are to make mistakes while driving. The most expensive insurance policies are usually paid by teen drivers, while drivers over 50 years old pay the least.
Insurance companies see teen drivers as the riskiest and most expensive policyholders to insure. Data shows that teen drivers are the most reckless and get into more accidents than any other age group. Thankfully, young drivers can start seeing more savings at the age of 20, and rates get even better at age 25. Premiums reach the lowest for drivers in their mid-50s, before becoming more expensive again for drivers who are 70 years and older.
Two pieces of your location are taken into consideration: state and ZIP code.
Each state has its own laws to regulate insurance policies that auto insurance companies need to take into account. For example, some states are no-fault states and require all drivers to add unlimited personal injury protection (PIP) onto their policy. Policyholders in these states can expect to pay more for their coverage because of the added unlimited PIP.
Insurance requirements and state minimums vary by state, so ask an agent what you might need in terms of collision coverage, comprehensive coverage, property damage liability, bodily injury liability, and more. Full-coverage car insurance isn’t necessary for everyone, and removing it can help cut costs.
Your neighborhood can also determine how much you pay. In most cases, insurance costs more in places that have more drivers, like urban areas, because a higher concentration of drivers means a higher risk of accidents. Living in areas that are more prone to natural disasters, like floods or fire, or crimes, like vandalism or theft, will also cause your policy to go up.
This factor mostly impacts young drivers because insurance companies see young male drivers as significantly more reckless. This makes them more prone to risk, and therefore, they are more expensive to insure. Young female drivers are seen as relatively safer than young male drivers, which gets them lower rates.
This has a minimal effect on how much you pay for your policy, but data shows that married drivers file fewer claims. This might be because partnerships are more likely to split up driving and tasks, causing less of a reason to get behind the wheel. There is a very minor difference in rates for married, divorced, single, and widowed drivers.
If you drive a brand new sports car, chances are that your premium will be more expensive than if you drive an old Honda Civic, for example. Cars that cost more to replace and repair also cost more to insure. Expensive vehicles are usually charged more for collision coverage and comprehensive coverage in their insurance premiums.
The same person can get different insurance quotes from different companies. This is why it’s important to shop around when looking for a policy. Every insurance company has its own way of calculating how much car insurance premiums cost, but they usually take the same factors into account when deciding how much—or how little—it will be.
States with the Cheapest Car Insurance
What are the cheapest states for car insurance?
On average, drivers in Hawaii, North Carolina, Maine, New Hampshire, and Idaho see the cheapest monthly rates for car insurance. However, drivers in every state can save on car insurance by exploring discounts and comparing quotes from multiple insurance companies.
Price shouldn’t be the reason you go without a car insurance policy. Auto insurance is mandated by law in all but two states (Virginia and New Hampshire). Still, having insurance coverage can keep you and others safe on the road. Affordable car insurance quotes are just a few clicks away.
|State||Average Monthly Cost of Car Insurance|
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Cheapest Car Insurance Companies in Every State
If the state you live in isn’t one of the cheapest states to get car insurance in, don’t worry! We put together a list of the cheapest car insurance companies in every state to make sure that people don’t run the risk of being uninsured drivers, no matter where they live. Keep in mind that these are just average car insurance rates, and there are always other ways to save with discounts.
|State||Insurance Company||Average Monthly Cost of Car Insurance|
|Alaska||Midvale Home & Auto||$161|
|Delaware||Midvale Home & Auto||$221|
|New Jersey||Plymouth Rock||$179|
|New York||TSC Direct||$138|
|North Carolina||Direct Auto||$63|
|North Dakota||Midvale Home & Auto||$118|
|South Dakota||Midvale Home & Auto||$126|
Why Auto Insurance Rates Vary from State to State
Not only do auto insurance rates vary from person to person, but they also depend on where you live. You can read above for the factors that insurance companies use to determine someone’s unique rate, but know that location is one of the big reasons why you might be paying more or less for your policy.
Car insurance laws vary by state
Each state has its own laws that regulate insurance policies. Auto insurance companies need to take this into account and will adjust the policies they offer—and their prices—depending on minimum requirements. No-fault states might require all policyholders to include other add-ons with their policy, which causes them to pay more for coverage due to the extra requirements.
Your state is more prone to natural disasters
Unfortunately, residents who live in areas that are more likely to be hit by natural disasters, like floods, landslides, or wildfires, can expect to pay more for their policies. Car insurance companies see policyholders as more expensive to insure if they need to worry about the cost of replacing or repairing cars hit by weather-related incidents.
Urban areas cost more than suburban areas
Your specific neighborhood and ZIP code can determine how much you pay in insurance. Policies cost more in cities with more drivers because more people on the road means a higher chance of accidents. Areas with more people might also be more likely to get hit by vandalism and theft, which can also cause your policy to go up.
Frequently Asked Questions
While Hawaii is known for sky-high real estate prices, it’s the cheapest out of all 50 states for car insurance. On average, Hawaii residents can expect to pay around $105 per month for a policy, which is much cheaper than the national average cost of around $234 per month.
Each state has its own requirements and laws that determine the minimum coverage that motorists need in order to drive legally. Insurance providers in each state need to abide by these laws and will adjust the prices of their policies in order to include all types of coverage.
Insurify is the number one place to find the best—and cheapest—car insurance in your state. In minutes, we comb through hundreds of insurance companies to give you a list of affordable rates. This way, you know you’re getting the best coverage that won’t break the bank.
Compare Cheap Car Insurance Quotes in Your State
How much you pay for your car insurance policy depends on a number of factors: your unique driving history, age, credit history, and more. Usually, location plays a big part in determining how much—or how little —you pay. But even if your state isn’t one of the cheapest, there are still ways to save on your policy.
Insurify can help you find cheap car insurance rates in just a few minutes. We do all the work to pull together quotes from hundreds of insurance companies in the market so you don’t have to worry. With discounts and side-by-side comparisons, we make it as easy as possible to get an affordable insurance policy that gives you peace of mind on the road. Get your free quote today!
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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.