If there’s one thing everyone wants to know about auto insurance, it’s its price.
There is no one-size-fits-all formula. The amount you will pay for auto insurance is affected by a number of very different factors, from the type of coverage you want to your driving record to where you live. And each company has different parameters for determining how much you will pay for your auto insurance policy.
With so many options available – and the potential to save money by comparing purchases and taking advantage of discounts – making impulse decisions about your auto policy can be costly.
If your auto insurance renewal is just around the corner, or if you haven’t purchased a quote in a year or more, use that time to see what you should expect to pay. A good place to start in determining if you are overpaying for auto insurance is to consider the average cost of auto insurance.
Average cost of auto insurance per business
The average cost for minimum auto insurance is $ 565 per year, while full coverage auto insurance costs an average of $ 1,674 per year, according to the latest data from Bankrate.
To find the best auto insurance company, get quotes from at least three or four insurance companies to compare prices, coverage options, and any other benefits. Below you can compare the average annual rates of several insurance companies.
- USAA is the cheapest company for full coverage auto insurance with an average annual rate of $ 1,225, followed by Erie Insurance and Travelers.
- MetLife is the most expensive company for full coverage auto insurance at $ 2,123 per year on average, followed by Farmers and Allstate.
- Auto-Owners is the cheapest auto insurance company for the minimum coverage required, with an average annual auto insurance rate of $ 382, ââfollowed by USAA and Amica.
- MetLife is the most expensive auto insurance company for minimum required coverage, at $ 821 per year on average, followed by Farmers and Allstate.
|Insurance company||Premium full coverage||Minimum coverage premium|
|Allstate||$ 1,921||$ 696|
|Amica||$ 1,378||$ 405|
|Car owners||$ 1,351||$ 382|
|Geico||$ 1,405||$ 433|
|Erie||$ 1,233||$ 409|
|Farmers||$ 2,000||$ 808|
|MetLife||$ 2,123||$ 821|
|At national scale||$ 1,485||$ 501|
|Progressive||$ 1,509||$ 582|
|State farm||$ 1,457||$ 539|
|Travelers||$ 1,325||$ 469|
|United States||$ 1,225||$ 384|
Average cost of auto insurance by type of coverage
The type of auto insurance coverage you get and the amount will determine your auto premium amount. Liability insurance is the minimum coverage you need to drive in most states, and it covers property damage and personal injury if the accident is your fault, up to your covered limit. .
Then there are optional types of coverage that protect your vehicle like full coverage and collision that aren’t required by law, but most people have. Having a combination of liability, property and casualty and collision insurance is generally referred to as âfull coverageâ insurance.
Below is the average annual premium for common types of auto insurance coverage.
|Type of cover||National average annual cost|
Average cost after causing an accident
Your auto insurance rates are almost always guaranteed to increase after an accident, but it’s hard to say exactly by how much. This will depend on a variety of factors, including your insurer, the state you live in, your age, and whether you have a history of accidents or traffic violations. According to the Insurance Information Institute, a rate increase will generally last three years after a claim. Bank rate data shows that the difference in rates before and after an accident can reach $ 560 on average.
|Average annual premium for minimum coverage||Average annual premium for minimum coverage|
|Before an accident||$ 563||$ 1,738|
|After an accident||$ 803||$ 2,299|
Average cost of auto insurance by state
Your state and the area in which you live can have an effect on your auto insurance rates. Data from the National Association of Insurance Commissioners shows that the average cost of auto insurance varies widely from state to state; the prices in the more expensive states are more than twice as high as those in the cheapest. Below you can compare the average annual rates in each state.
- Maine is the cheapest state for full coverage auto insurance with an average annual rate of $ 765.
- Louisiana is the most expensive state for full coverage auto insurance at $ 1,638 per year on average.
- North Dakota is the cheapest state for minimum coverage auto insurance with an average annual rate of $ 304.
- Florida is the most expensive state for minimum coverage auto insurance with an average annual rate of $ 964.
|State||Premium full coverage||Minimum coverage premium|
|Alabama||$ 1,015||$ 479|
|Alaska||$ 1,072||$ 561|
|Arizona||$ 1,126||$ 608|
|Arkansas||$ 1,039||$ 458|
|California||$ 1,116||$ 566|
|Colorado||$ 1,195||640 $|
|Connecticut||$ 1,276||$ 744|
|Delaware||$ 1,322||$ 844|
|District of Colombia||$ 1,466||$ 744|
|Florida||$ 1,446||$ 964|
|Georgia||$ 1,286||$ 735|
|Hawaii||$ 918||$ 469|
|Idaho||$ 780||$ 403|
|Illinois||$ 977||$ 507|
|Indiana||$ 840||$ 432|
|Iowa||$ 795||$ 339|
|Kansas||$ 948||$ 400|
|Kentucky||$ 1,044||$ 586|
|Louisiana||$ 1,638||$ 937|
|Maine||$ 765||$ 370|
|Maryland||$ 1,256||$ 700|
|Massachusetts||$ 1,215||$ 643|
|Michigan||$ 1,494||$ 874|
|Minnesota||$ 939||$ 484|
|Mississippi||$ 1,106||$ 511|
|Missouri||$ 1,003||$ 493|
|Montana||$ 969||$ 423|
|Nebraska||$ 934||$ 417|
|Nevada||$ 1,259||$ 799|
|New Hampshire||$ 861||$ 426|
|New Jersey||$ 1,465||$ 932|
|New Mexico||$ 1,051||$ 548|
|new York||$ 1,486||$ 869|
|North Carolina||$ 839||$ 372|
|North Dakota||$ 809||$ 304|
|Ohio||$ 865||$ 439|
|Oklahoma||$ 1,101||$ 503|
|Oregon||$ 1,044||$ 677|
|Pennsylvania||$ 1,065||$ 539|
|Rhode Island||$ 1,467||$ 870|
|Caroline from the south||$ 1,145||$ 645|
|South Dakota||$ 872||$ 327|
|Tennessee||$ 957||$ 456|
|Texas||$ 1,296||$ 631|
|Utah||$ 984||$ 568|
|Vermont||$ 842||$ 375|
|Virginia||$ 920||$ 469|
|Washington||$ 1,078||$ 667|
|West Virginia||$ 1,072||$ 513|
|Wisconsin||$ 805||$ 412|
|Wyoming||$ 936||$ 354|
Factors That Determine Your Auto Insurance Premium
Your rate is determined by dozens of different factors, and those factors vary among insurance companies. It’s hard to determine exactly what each insurance company analyzes to determine your premium, but here are some of the most well-known that influence the price you pay for auto insurance, according to the experts we spoke to and l ‘Insurance Information Institute.
- Site: Your location plays an important role in your auto premium. Each state has specific minimum auto insurance requirements, so the laws in your state will influence the amount of coverage you need to purchase to legally drive. Additionally, many insurance companies consider drivers who live in urban areas to be more vulnerable to vandalism, theft and accidents. This can lead to higher rates compared to those living in suburban or rural areas, according to III.
- Vehicle: The cost of your car affects the cost of insuring it. A luxury car, for example, will be much more expensive to insure than a conventional sedan or SUV. The amount that you drive your car also plays a role in your rate; the more kilometers you drive, the more risk of accidents you have. As a result, you will pay more.
- Type and amount of coverage: The type of coverage you choose and the limits and deductibles you choose will play a role in the cost of an insurance policy.
- Driving history: A good driving record can lower your auto insurance rate, and a bad driving record will do the opposite. New drivers also generally pay more because they are less experienced and more likely to have accidents.
- Credit history: If you’ve ever applied for a line of credit or got a mortgage, you know credit scores matter a lot. This same principle applies to auto insurance, except that it is a credit-based insurance score (slightly different from a credit score). Insurance companies often use insurance scores – which are based on your credit history – to determine your rate.
- Age: Data shows that the more driving experience you have, the less likely you are to have an accident, and driving experience is generally correlated with age. Insurers generally consider older, more experienced drivers a lower risk on the road compared to teens or people under 25, and will therefore generally charge less.
- Kind: Auto insurers are allowed to set rates partly based on gender in almost all states. According to III, women often pay less for coverage because men tend to have more accidents.