Average Cost Of Car Insurance in 2023

One of the questions I get asked the most as an insurance professional is how much one can expect to pay for their car insurance. It’s never a black-and-white answer, unfortunately. The truth is that the price of car insurance can vary, depending on many different factors.

But while there are a variety of variables insurance companies consider to determine the price of your policy, they tend to use the same ones. So knowing what these factors are will help you get an idea of whether you will pay more or less than the average person for insurance.

Your driving experience includes how long you’ve been driving and also whether you have had any past violations or accidents. The fewer accidents or violations you’ve had, the lower your price will generally be. Similarly, your price will be lower if you have driven for years as opposed to just getting your license.

Average Cost of Car Insurance by State

Each state has regulations to which each insurance company must adhere if they wish to conduct business there. This regulation includes what the insurance companies are allowed to rate for. For example, the state of Massachusetts bans insurance companies from using a credit-based insurance score to set their rates.

The states also set the minimum insurance requirements and how much coverage a driver must purchase. Rhode Island requires a minimum of $25,000 per person, $50,000 per accident for bodily injury coverage, while Texas requires $30,000 per person, $60,000 per accident. The higher the coverage, the more money your policy will generally be.

Lastly and most importantly, each state is unique. Insurance companies take each location into consideration to determine their exposure to loss. Some of the factors they may look at to base their prices on are population density, incidents of fraud, climate, such as their propensity to wildfires or hurricanes, rates of crime, such as theft or vandalism, and the state’s overall prior accident history.

Most Expensive States

Forbes cites New York as the most expensive state for car insurance, with prices 125% higher than the national average. This can be due to its population density, or high rates of lawsuits, similar to Colorado. Louisiana and California have catastrophic weather events such as hurricanes and wildfires that drive the cost of their auto insurance, while Michigan has higher rates of fraud.

Least Expensive States

With prices of $547 lower than the national average, Maine is the least expensive state for car insurance, followed by Vermont, Wisconsin, Utah, and Ohio. The reasons these states make the top 5 for least expensive car insurance vary. But low rates of uninsured drivers, less severe weather, and more rural areas are some of the reasons they make the cut.

Average Cost of Car Insurance By Age

It is important for insurance companies to match their premium to their exposure to loss. This helps them to stay profitable. What this means is that you are often charged based on how likely you are to be involved in a loss.

As such, it is understandable that younger, more inexperienced drivers pay more for their car insurance than older drivers who have been driving for years. Most insurance companies will charge higher premiums for younger drivers until about age 25 when the rates start to decrease. However, the rates will start to increase again around age 70 when the risk of accidents is higher.

Somewhat surprisingly, drivers aged 25-34 make up 18.8% of all fatal car accidents. This is possibly due to being on the road more than the younger age group, and higher rates of alcohol consumption. But even despite this statistic, rates are noticeably higher for drivers under the age of 25.

How Much is Car Insurance by Gender?

While some may argue that it’s discriminatory, insurance companies may also base your price on your gender. Some states prohibit this, but most do not. In general, men pay more for car insurance than females. However, this cost disparity decreases as the drivers get older.

Statistically, men spend more time on the road and get into more accidents than women. In fact, men are involved in 72% of all fatal car accidents according to data from The National Highway Traffic Safety Administration (NHTSA). Due to this, men will often pay more for insurance than their female counterparts.

Average Cost of Car Insurance by Coverage Level

The more coverage you have on your cars, the higher your insurance price will be. As mentioned previously, the majority of states will require you to carry at least bodily injury and property damage coverage, which ensures that other drivers are protected on the road from any damage you cause. This is what is referred to as “liability coverage.”

Most insurance companies will offer more coverage than liability, such as uninsured motorist coverage, medical payments, or personal injury protection. If you purchase additional coverage like comprehensive and collision, which covers your car in a loss, this is often referred to as “full coverage.”

While there really is no such thing as being fully covered in car insurance, the term is used to describe having both liability and physical damage coverage (comprehensive and collision). Comprehensive provides coverage for your car in events such as fire, theft, vandalism, and collision with an animal. Collision provides coverage for damage to your car caused by you striking something, such as another car or object.

Since there is more coverage being provided with purchasing comprehensive and collision, the price will be significantly higher than if you purchased liability. The price difference will vary by state as each state will require different liability limits or coverages. But here is a breakdown of what you can expect this difference to be.

How Much Does Car Insurance Cost by Marital Status?

Another piece of data used to determine the price of your car insurance policy is marital status. Believe it or not, whether you are single, married, divorced, or widowed can make a difference in how much you pay. There are a few reasons for this.

First, married drivers are more likely to combine policies to receive multi-vehicle discounts, or have homes and other assets to insure with the company for multi-policy discounts. In addition, married individuals stay home more, drive less overall, and statistically get into fewer accidents than single, divorced, or widowed drivers. For these reasons, insurance is generally less expensive for married couples, seeing up to a $130 difference in price.

How Much Car Insurance Costs by Provider

Although most insurance companies review the same factors to determine the price of your policy, they each weigh the factors differently. For example, one company may not consider your credit score, while another may weigh that factor heavily, or some may offer discounts that others do not. The best way to know which company is the most affordable for you is to shop around.

Car Insurance Costs by Driving Violations

As you may have estimated by now, insurance companies base their rates on their exposure to loss. So it only stands to reason that a driver with multiple violations on their record would pay more for insurance than someone who does not. Especially if that driver has less experience on the road.

Drivers with major violations, such as a DUI, reckless driving, or fleeing the police will see higher premiums than those with minor violations. It is understandable to get a ticket every so often. We’ve all been there! But having multiple violations, especially in a short amount of time makes you a higher risk to insurance companies, who will want to charge you more or deny you insurance completely.

How Much is Car Insurance After an Accident?

Similar to violations on your record, certain accidents can cause your car insurance premium to be higher. At-fault accidents will generally cost you more than not at-fault losses.

But this also varies by state. Some states prohibit surcharges on certain losses, meaning insurance companies aren’t able to penalize you and increase your rates because of that claim. They can, however, remove any discounts you have for being a safe driver or claim-free, which can affect your price.

Average Car Insurance Cost After a DUI

Driving impaired signals irresponsibility and poor decision-making to insurance companies, and this charge will significantly impact the price of your car insurance. DUIs cause an average increase of 70% in price nationally, which is higher than the national average for increases after an accident. Considering DUIs and accidents often coincide with each other, you’re potentially looking at a large increase in the cost of your insurance if you drive under the influence of alcohol or drugs.

Average Cost by Speeding Ticket

The price of your car insurance after a speeding violation largely depends on the age and experience of the driver who was cited. For example, a 16-year-old who gets a speeding ticket will often see a larger increase than someone who has years of driving experience.  The driver’s previous driving record also matters.

If this is one’s first speeding violation, it is not weighed as heavily as subsequent ones. And of course, the state you live in makes a difference also. What is mostly consistent across the board is that your policy will see the effects of this violation for at least three years.

Car Insurance Rates After a Red Light Infraction

A red light violation on your record can impact your car insurance similar to a speeding violation. Your rates will most often increase, although the amount of the increase depends on your age, previous driving record, and state. You can expect the violation to affect your insurance for at least 3 years.

Average Rates for Drivers With Bad Credit

Not all states or insurance companies base their rates on a credit-based insurance score. The following states prohibit the use of credit as a rating or eligibility factor:

• California
• Hawaii
• Maryland
• Massachusetts
• Michigan

For the states or companies that do utilize credit-based insurance scores, it is because there seems to be a historical correlation between lower credit and having a higher likelihood of loss. But opponents of credit scores and insurance pricing say that it disproportionately affects lower-income communities to their detriment. Regardless of which side of the fence you’re on, here are the average rates for drivers with poor credit.

Average Cost by Vehicle Type

The type of car you drive also largely impacts the price you pay for insurance. This is because some cars are more expensive to replace or repair. Especially with the new technology built into vehicles in recent years.

Some vehicles are involved in losses more frequently than others. The National Insurance Crime Bureau cites the Honda Accord as the most stolen car of the past 10 years. Therefore, the insurance on this car may be higher than other vehicles of similar body type.

Lastly, the price you’ll pay for insurance on any vehicle will depend on your previous driving experience, driving history, and state.

How Driving History Affects Rates

An individual’s driving history is one of the largest predictors of an insurer’s exposure to loss. Therefore, it is one of the biggest drivers of price. A driver with a clean record typically pays an average of 29% less for car insurance than those with accidents or violations.

Insurers use consumer reports to pull your motor vehicle report (MVR) and claim history. They typically look at the past 3-5 years of driving history to determine price and eligibility. So any violations or accidents that occurred during this time will affect your policy.

What Factors Affect Your Car Insurance Rate

There are numerous factors that go into calculating your premium. In addition to the ones mentioned above including age, gender, vehicle type, credit score, and driving history. The following are some other common examples.

Location

The state you live in, and where you primarily park your car can affect how much you will pay for car insurance. Each state has its own set of regulations that each insurance company must obey, including the coverages offered. Each state can then be broken down into different areas that have their own specific rate. Parking your car in an urban area has different exposures to loss than living in a suburb where your car is parked in a garage, for example.

Vehicle Usage and Mileage

How you use your car and how often you drive are two other factors that can be used to determine your price of insurance as well. The more time you spend on the road, the more you’re likely to get into an accident. So the higher the mileage, the more you will typically pay.

Similarly, if you’re using your car for commuting back and forth to work, you’ll most likely be driving more than someone who may just be driving for pleasure. That will affect your price as well.

Coverages

The coverage you choose for your vehicles will understandably also have an impact on how much you pay for insurance. The higher limits you choose, the more your insurer will potentially need to pay out in a claim. Therefore, the price will be higher.

While adding comprehensive and collision coverages will increase the price of your policy overall, choosing a higher deductible can help keep the costs lower. The higher your deductible, the lower your premium will be. This is because the deductible is your out-of-pocket expense. The more risk you take on, the less the insurance company has to potentially pay out in a loss.

What Are Some Of The best Car Insurance Companies?

How Much Will Car Insurance Cost For Me?

As you can see, there are so many factors that go into determining the price of an individual policy. So no one can give you an exact price without having access to consumer reports and each insurance company’s rates. This is where talking to a licensed insurance expert can help.

Speak to an independent agent or an insurance company representative directly. They can advise on the right coverages for you, and suggest ways to save money. Lastly, shopping around is the best way to ensure you’re getting the best price.

How to Get Cheap Car Insurance

Although some of the factors for pricing your policy are outside of your control, there are ways you can save. Namely, taking advantage of all the discounts for which you are eligible. Here are some common discounts that most insurance companies will offer.

• Good Student Discount- If you have a student under the age of 25 or are one yourself, inquire about the good student discount. With a cumulative GPA of 3.0 or higher, full-time students can save up to 14% on their car insurance.

• Annual Mileage Discount- Driving less than 5,000-7,500 miles annually usually yields some sort of low mileage discount from insurers. The percentage can vary between insurers but between 5%-20% is typical. Just be prepared to show proof to your insurance company!

• Multi-Policy Discounts- Most insurance companies will offer a 5%-10% discount on your car insurance for having a home/renters policy with them as well. Commonly referred to as “bundling” your policies, this is one of the best ways to save money.

Defensive Driving Discount- Drivers who take an insurance-approved defensive driving course can earn a discount of 5%-10% on their auto policy. Talk to your insurance company first to ensure this discount is offered and the course meets their discount guidelines.