What is the cost of car insurance?

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Call for FREE quotes: (888) 442-5133

Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently...

Full Bio →

Written by

Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business...

Full Bio →

Reviewed byBrad Larsen
Licensed Auto Insurance Agenthttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/cheapcarins-live/daeea45a-brad-larsen.jpg

UPDATED: Mar 13, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Car insurance cost is based on a number of factors and will vary primarily on your driving record, where you live, your credit score and the type of vehicle insured. Auto insurance premiums are based on risk and car insurance companies calculate your risk by analyzing a large number of variables to see how much risk you pose to file a future claim. Ultimately a car insurance company is a for-profit corporation so they certainly want to see a chance they will collect more in premiums than pay out otherwise your customer relationship is costing them money and when have you ever heard of big business wanting to lose money.

A lot of risk for minor accidents is already factored in the car insurance risk formula but this formula also differs depending on what insurer is analyzing your profile. Although there are many common terms in the car insurance nothing is as different as the ways each auto insurance company measures risk. With one provider you may be eligible for a good driver discount even with an accident in the last year while others may view you as high risk or even deny coverage. Most drivers never really have much of a problem obtaining auto insurance however there are factors you should be aware of which directly affect the cost of car insurance.

Your Driving Record

Your driving record plays the most critical role in calculating risk. Drivers with clean records and free of moving violations certainly enjoy many good driver discounts and lower rates however those drivers with serious violations (such as a DUI conviction) or a history of accidents can be denied coverage. Most car insurance companies cater to good drivers or those with a couple common blemishes but high risk drivers often need to located a specialized car insurance company (like the General Auto Insurance) or join a state program for high risk drivers. A single car accident or speeding ticket will generally not affect your auto insurance rates too much but repeated claims and a poor driving record is the worst thing you can have when it comes to finding auto insurance.

The Type of Vehicle Insured

In the event of an accident car insurance coverage is used to repair or replace a vehicle so the cost of the vehicle certainly plays a big role. Insuring a $75,000 Mercedes or a $20,000 Ford Focus obviously poses a different amount of risk to a car insurance company and they compensate accordingly adjusting this portion of your risk formula to account for the value of the car and estimated repair costs.

Where you live

Car insurance rates vary by state and national average premiums (according to Insure.com) run around $1,430. Louisiana is the highest state with a $2,510 annual average while Maine, Vermont and Ohio all come in under $1,000. The vast difference in car insurance rates by state is due to different state laws, competition in the marketplace and general risk factors of the region. Most of the differences by state are based on factors outside of your personal driving record or type of vehicle so the only thing you can do to lower rates is make sure to maintain a good driving record, compare car insurance companies and always ask about auto insurance discounts… or move.

Your Credit Score

Unfortunately how you pay other bills can affect your auto insurance rates. The logic here is that people with bad credit often file more claims than people with good credit and statistics have proven this is in fact the case. While many people argue the use of credit scores is irrelevant to the cost of auto insurance and some states have even banned the use of credits scores by insurance companies there is no doubt the logic here is true and simply an ethical argument by consumers. We highly doubt any consumers with good credit complain about this.

There are many other factors which determine the cost of car insurance but these 4 play the biggest role in calculating premiums.

Get Started – Compare Car Insurance Quotes Today!

Start Saving on Car Insurance!

Enter your zip code below to compare rates from the top companies in your area

 Secured with SHA-256 Encryption