How much is car insurance?
So, you are ready to hit the road with your car, and you are worried about how much protection you have? Whether you are using your new license or getting a well-trained driver, the first question you should ask yourself is, how much is auto insurance?
In the quest to find the right car insurance quotes, you will have to visit and check on various car insurance companies that will give favorable terms at minimum car insurance rates costs. Besides, it would help if you equipped yourself with car insurance determinants, including demographics such as age and gender, marital status and location, car specifics, and driving habits. With this information, you will learn that what is best for your neighbor might not work for you.
What is the average cost of car insurance?
If you wonder how much it will cost you to insure your car, the most straightforward answer you can ever get is, “it depends”. This is because car insurance is based on various factors such as your ZIP code, your driving experience, the company you choose, your credit score, the type of car you decide to buy, and many more.
As a new car buyer, you need to enter most of this information and compare different auto insurance quotes to get a reliable estimate. However, suppose you are in a hurry to get a rough figure. In that case, the average cost of car insurance in the United States is around $1,200 per year; this is about $100 per month, according to the National Association of Insurance Commissioners.
This cost can also vary depending on the type of insurance policy you take. For instance, minimum liability coverage is cheaper than full coverage car insurance. While this may sound enticing as you will have to pay less for your insurance, you should also know that you may end up incurring higher maintenance costs later.
Determinants of a car insurance
As stated above, getting the best car insurance rate goes beyond the coverage types and your car model. As such, other auto insurance determinants fall under these three classes:
Your demographics
Personal information and financial status are also significant in winning the cheapest car insurance. Each state has its own minimum requirements, and, of course, other factors, including:
- Driver’s age and gender. Most car insurance companies will review drivers’ age and gender before settling for a specific rate. It is assumed some driving risks are associated with the age and gender of the driver, resulting in different calculations. For example, young men cause most accidents and usually receive higher auto insurance rates than young women. Similarly, older women tend to crash more often than older men; thus, they receive a higher quotation.
- Marital status. Married people tend to cause fewer accidents than singles. This explains why couples receive lower car insurance premiums, which also depends on their driving history. As such, men with clean driving history will have their insurance rates reduced drastically once they wed.
- Credit score. Your credit score also plays a major role when calculating how much you will pay for your auto insurance. For instance, car buyers with a good credit score will be less than those with poor credit scores. This means you need to maintain a good credit history if you want to receive more insurance discounts.
Car features
Some of the car’s specifics that may affect its insurance cost include:
- Car’s age. Car insurers will also calculate their minimum coverage by considering how much it costs to replace the car in case of a total loss. With this in mind, it is vital to know that new cars cost more to replace during a total loss, hence need a higher collision coverage than old or second-hand cars.
- Car’s safety rating. Every car passes through the auto safety rating process and clean driving record to ensure the driver’s safety in case of an accident. Therefore, a car with a higher safety rating means a safe driver and will only need cheap car insurance to pay for medical bills.
- The car size. The size of the car and the engine also affect the annual premium paid. Larger cars pay less for insurance since they are safer in accidents than small cars. However, cars with larger engines will pay a higher premium compared to those with smaller engines.
Driving factors
Your driving habits will determine if you will get a cheaper car insurance policy or not. This is because most car insurers will look at these two main factors during their estimations:
- Your driving history. Before signing your auto insurance policy, a company will look at how often you were involved in accidents. Suppose you have a bad driving record, such as more fault accident involvements. In that case, you are likely to pay more on your average car insurance rates. Similarly, drivers with more speeding tickets or liability insurance claims can have temporary rate increases than this without.
- Your driving activity. Auto insurance companies will also calculate your rates depending on how much time you spend behind the wheel. Cars that have more time on the road are likely to cause more accidents, meaning they will have higher rates, while those that spend the most time in the garage are likely to have lower rates.
Best car insurance companies
Different insurance providers will work best for specific groups depending on various factors such as customer service ratings, available benefits, and their average insurance payment. Here are the best car insurance companies for significant categories:
USAA
USAA is the most affordable car insurer in the industry due to its excellent customer service rating. However, its services are only applicable to current and former military and their families. USAA also has lower rates and insurance discounts on both cars and homeowners, making it an ideal choice for young adults who are just getting into the auto industry. For example, military who stay in camps or are deployed overseas can receive up to 60% discounts.
Some of the USAA’s coverage types include:
- Personal injury protection and medical bills.
- Collision coverage.
- Comprehensive insurance.
- Property damage liability.
Geico
Geico is also among the winning insurance companies due to its lowest insurance payments and excellent customer attendance. Besides, its uniqueness in services involves providing a highly convenient website and mobile application that helps drivers handle their cost of auto insurance policies on the go.
Geico’s insurance services include the basic insurance types, guaranteed asset protection (GAP), rideshare, and mechanical breakdown insurance. It also offers numerous discounts, including a multi-policy discount if you take home and car insurance at once.
State farm
State Farm auto insurance company is among the best options for those looking for a local agent or online services. It has the top-rated in-person interactions with more than 18000 local agents in most states. Besides, State Farm has a convenient Pocket Agent smartphone application that customers can use to pay insurance premiums, file claims, and request roadside assistance.
Like Geico and USAA, State Farm also offers basic coverage types and other services like GAP and rideshare insurance policies. It also offers numerous deductible insurance discounts, including Drive Safe and Save incentive and a 5% discount on the insurance once the driver enrolls.
The verdict
So how do you get your national average car insurance costs?
Getting a nationwide estimation on car insurance can be a tricky task for new car buyers. However, with the above information, one can easily calculate how much it will cost them to get full coverage limits for their cars. There are free platforms that will do the comparison shopping for you, such as CarInsurance.net, which will use your data to give you the best quotes from every major insurance carrier. You can also visit the car insurance quotes section or talk to a national insurance agent to get their coverage estimation within minutes, but the comparison platforms do it all at once.
Rose Rosie is a writer for the personal finance website, Joy Wallet, which provides readers with useful information, resources, and tools to help maximize their financial fitness.
