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Factors that affect auto insurance rates include your age, driving history and marital status, as well as information about your car, such as its model year.
Car Insurance Cost
By: Heidi Wallis By: Heidi Wallis Heidi is a writer from Virginia City, Nevada, with over 15 years of experience creating insurance content for companies such as Allstate and Esurance. Heidi is an authority on auto insurance.
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Editor: Rashon Mitchner Editor: Rashon Mitchner Managing Editor Rashon Mitchner is an editor on the leadership team with over 10 years of personal finance and insurance experience.
Car insurance does not pay the same amount for everyone. There are many factors that affect your auto insurance rates, including your personal information and information about your car. We at the Leadership Team will explain 10 of these factors and explain how you can get a lower rate. We will also recommend two of the best car insurance companies so you can get a policy from a reputable provider.
The Guides team is committed to providing reliable information to help you make the best car insurance decision. Because customers rely on us to provide objective and accurate information, we’ve created an extensive rating system to compile our ranking of the best car insurance companies. We’ve collected data on dozens of auto insurance providers to rank companies based on several ranking factors. After 800 hours of research, the final result was an overall rating for each provider, with the highest-scoring insurers at the top of the list.
Many factors affect the cost of car insurance. Some, like location, vehicle type, and driving history, are relatively straightforward. Others, like credit history and marital status, can be a bit more strange.
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The age and type of vehicle you drive affects the cost of car insurance. When setting rates, insurance companies take into account the average cost of claims for different types of vehicles. More expensive vehicles with new technology and advanced safety features cost more to repair or replace, so they usually cost more to insure.
So this means that a newer, more expensive vehicle with lots of bells and whistles costs more to insure than an older base model car with high mileage. And a sports car is considered more risky than a minivan, so it has a more expensive insurance policy.
The make of the vehicle also affects your insurance premium. According to Quadrant Information Services, Dodge has the highest average car insurance costs, while Mazda has the lowest.
Age can significantly affect car insurance, especially for drivers under 25 or over 75. Because insurance companies take into account the expected risk when determining rates.
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According to statistics, young inexperienced drivers are more likely to make mistakes or take unnecessary risks while driving, and older drivers are more at risk of accidents after the age of 70.
Where you live and where you park your car overnight (known to your insurance company as a garage address) affects your car insurance rate. For example, drivers in big cities often pay higher rates than drivers in rural areas. Here are a few reasons:
In addition to where you live in your state, the state itself affects your insurance rates. If you live in a state where storms or heavy snow are common, you will likely pay more for your car insurance. If you live in a densely populated state, you can usually expect higher car insurance premiums as well.
Auto insurance is regulated by the states, so each state has minimum, if any, coverage requirements. Drivers in states that require more liability insurance or set higher policies often pay more for coverage than people in other states.
Average Car Insurance Rates By State #infographic
Based on the average cost of comprehensive car insurance per state, the most expensive states are Michigan and Connecticut. The states with the cheapest auto insurance are Maine and Ohio.
Having a clean record, meaning no tickets or accidents, is one of the most important things you can do to save money on your auto insurance. Many car insurance companies offer a certain discount for being a good driver or for having no claims to encourage safe driving habits.
Of course, accidents happen. But different types of accidents and traffic violations are rated differently in terms of risk, so they affect car insurance rates differently. The amount of time an accident or fine stays on your record varies by state, but it’s usually between three and five years. However, some offenses, like a DUI, can stay on your list longer.
A speeding violation of 1 to 5 mph results in an average increase of $409 per year for full coverage. If you have three accidents, your rate will increase by an average of $3,620 per year.
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The gender listed on the driver’s license is another factor that affects the cost of car insurance. Men tend to have higher premiums because they are more likely to drive dangerously and get into accidents.
However, the following states do not allow gender to be used as a factor in determining car insurance rates:
In all states except Massachusetts and Michigan, your marital status affects how much you pay for car insurance. Married drivers usually pay slightly less than single drivers.
This is partly due to reviews, and partly due to discounts. Insurance companies see married drivers as safer, less risky and more financially stable because they accumulate assets. Married drivers may also be more likely to receive a multi-vehicle discount or deductible than their single counterparts.
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In most states, your credit history may also be taken into account when carriers determine your car insurance premiums. Insurance companies look at your credit history the same way they look at your driving history. Drivers with lower credit scores seem to take more risks while driving and are perceived as more risky.
Maryland allows providers to use your credit score to determine your rate for a new auto insurance policy, but does not increase your rate when you renew, decline, cancel or decline your policy.
Similarly, Oregon and Utah regulate the use of credit scores by insurance companies. These protections include prohibiting insurers from canceling or refusing to renew your policy because of your credit after you’ve had the policy for at least 60 days.
Insurance companies are risk averse, and a long history of claims will undoubtedly lead to higher premiums. How much your rate goes up and when depends on the insurance company and state.
What Determines The Average Cost Of Auto Insurance
Even one insurance claim, or a claim for which you were found not at fault, can result in higher premiums. However, some insurance companies offer accident forgiveness if it’s your first accident, so your rate won’t increase. Additionally, claims typically stay on your file for three to five years.
Although many factors in auto insurance rates are out of your control, you can directly influence whether you choose a higher or lower rate. Generally speaking, the higher the deductible, the lower the insurance rate. But this does not mean that it is always advisable to choose the highest deductible in order to pay the lowest premium.
If you decide to use a higher deductible, one option is to put any money you save on premiums into a savings account to have on hand if you ever need to pay.
The types of coverage you get and the coverage limits you choose also affect how much you pay for auto insurance. With the exception of New Hampshire and Virginia, every state requires some form of auto insurance. But beyond meeting your legal obligations and the state’s minimum requirements, you have many options for car insurance.
How Much Does Car Insurance Cost? (2023 Rates)
It is important to understand your needs and finances when choosing types of insurance and their coverage limits. Determine which coverage is best, minimum or full, and whether you will use additional coverage.
Nationally, average auto insurance rates for a 35-year-old married driver with a clean driving record and good credit are $1,730 a year for full coverage and $635 a year for minimum coverage. How much car insurance will cost you depends on some or all of the 10 factors we’ve discussed here. Comparing quotes from different providers can help you determine if a deal is right for you.
If you’re buying car insurance, there’s nothing you can do about your marital status, credit score, claims history, or anything else at this point. But that doesn’t mean you can’t do anything to try to get a better car insurance rate.
As auto insurance companies are constantly competing for market share, they often adjust rates up and down to try to gain a competitive advantage. Check to see if other companies have better rates. plus
Americans Will Pay 16% More For Auto Insurance By The End Of 2023
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