July 26, 2021

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The states with the highest and lowest car insurance rates

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What is the average annual cost of car insurance in the U.S.? Find out what factors affect the average rates of auto insurance for the year, plus the minimum and maximum costs for car insurance.

What are the average car insurance costs?

It may surprise you to learn what factors impact average car insurance costs. According to Insurance.com, a good driver with good credit pays an average of $1,555 annually for full coverage car insurance.  

However, how much an average American pays annually for their car insurance depends on many variables. Prices may vary due to something as simple as your location. With ever-growing premiums, some people may wonder if it is worth it to pay for car insurance in the first place.

But one thing is sure. If you don’t get your car insured, a simple rear-end tap may end up costing you a fortune. In most states, car insurance is a must for vehicle owners and laws in those states that require it, obligate drivers to have coverage.

Years of experience behind the wheel matter. But even the most experienced drivers can end up in an accident, especially when it’s caused by someone else.

Also see: 8 compact cars that get the best mileage—no plug required

If you just bought a new car, it’s best to consider insuring it before you start the engine and hit the road.

Average car insurance cost: minimum to full coverage

Laws in each state vary and so do the minimum auto insurance requirements from state to state. In other words, a friend of yours with the same driving experience, age and other factors can pay more or less than you for the same coverage if they live in a different state than you.

If you want to calculate exactly how much you will have to pay for your car insurance, shop around, including using this tool from Geico for a quote after you submit some general information.

More: 5 tips for young drivers to help lower car insurance

We list out the average minimum and full coverage costs for car insurance annually using the most recent data from a study conducted by Coverage.com. In addition, find out about factors that affect insurance plus the most expensive and the least expensive states for car insurance.

Average minimum costs annually:

  • $545 for a good driver with good credit
  • $680 after a speeding ticket
  • $810 following an accident 

Average full coverage costs annually:

  • $1,555 for a good driver with good credit
  • $1,863 after a speeding ticket
  • $2,125 following an accident
  • $3,777 for a married couple with a teen driver
Factors affecting car insurance rates 

Each insurance company uses a formula for calculating risk and rates. To breakdown what insurers look for, here’s some top items car insurers research that affect car insurance rates in your state and local area.

  • Location
  • High occurrence of natural disasters
  • Local crime rates
Top 5 most expensive states for full coverage auto insurance

When you live in a state that is more prone to natural disasters, higher crime or accidents in general, it will lead to top dollar insurance premiums for full coverage. As risk increases, so do premiums.

States with highest full coverage rates for car insurance:

  1. Florida: $2,587
  2. New York: $2,498
  3. Louisiana: $2,351
  4. Michigan: $2,105
  5. Rhode Island: $2,066
Top 5 least expensive states for full coverage auto insurance

The states listed below boast the lowest car insurance rates for drivers compared to other states in the U.S. Factors including lower crime and accident rates greatly impact the cost of car insurance. Lower risk to insurers leads to lower premiums.

States with lowest full coverage rates for car insurance:

  1. Maine: $831
  2. Ohio: $998
  3. Wisconsin: $1,049
  4. Idaho: $1,055
  5. Iowa: $1,122
Which factors impact the price of your car insurance?

Check out these typical insurance cost factors. And a warning — some of these may surprise you.

  • Credit score. Insurance companies assume that if you have a low credit score, you have a higher level of risk when driving. In other words, if you have a low credit score, you will pay more for car insurance. This may seem unfair but is yet again based on statistics.
  • Car type. Some cars are safer than others and perform better in crash tests. Do you want to pay less for your auto insurance? Well, you may want to consider a car that insurers consider safe and reliable.
  • Age and gender. Auto insurance does look at your age and gender for risk and rates. Drivers under the age of 25 will pay higher rates due to inexperience because they have a higher risk of getting into an accident. There is not much drivers under the age of 25 can do, except look at getting a good student discount. While men under the age of 25 are quoted higher rates, woman may pay slightly more when older.
  • ZIP code. Some localities have higher rates of theft and accidents. Insurance companies must remain profitable, which is why they factor this in.
  • Marital status. People who have not tied the knot pay higher premiums than married couples, studies show.
  • Your driving record. If your driving record includes one or more accidents, speeding tickets, or any type of reckless driving, expect to pay a higher premium.
How can you save on your car insurance?

There are ways to get a discount on your car insurance. A useful piece of advice is to bundle your home and car insurance. This is the biggest price cut you can usually get. You can also take advantage of multi-policy discounts with other types of coverage, including a boat or motorcycle.

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Another way is to insure multiple cars in the same company. If your cars have safety equipment, you will receive additional discounts.

Companies may also offer discounts for safe drivers, including those who take defensive driving course.

Don’t forget to drive safely. Remember, the safer you drive the less you will pay annually for your car insurance.

This story originally ran on KBB.com.

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