Auto insurance is a necessity for every driver on the road. It protects you financially in case of an accident, theft or other unforeseen events. However, many people wonder how much they should be paying for auto insurance. In this article, we will take an in-depth look at average auto insurance costs, as well as factors that can affect your premiums.
What is the Average Auto Insurance Cost?
The average cost of auto insurance varies depending on a number of factors. According to the National Association of Insurance Commissioners, the average cost of auto insurance in the United States in 2018 was $1,004 per year. However, this number may not be applicable to everyone since individual factors can affect it.
The factors that affect auto insurance costs include:
|Factors Affecting Auto Insurance Costs|
|Type of Vehicle|
Age is one of the most significant factors affecting auto insurance costs. Younger drivers tend to have higher premiums since they are considered high-risk drivers. According to data from the Insurance Institute for Highway Safety, drivers aged 16 to 19 are three times more likely to be involved in a fatal crash than those aged 20 and over.
However, auto insurance premiums tend to decrease as drivers get older. According to data from the same organization, drivers aged 60 and over have the lowest fatal crash rates among all age groups.
Overall, younger drivers can expect to pay more for auto insurance than older drivers. The average cost for a 16-year-old driver is $3,700 per year, while a driver in their 30s can expect to pay around $1,400 per year.
Gender can also affect auto insurance costs. According to data from the Insurance Institute for Highway Safety, men are more likely to be involved in accidents than women. As a result, insurance companies charge higher premiums for male drivers.
However, some states have laws prohibiting insurance companies from using gender as a factor to determine premiums. For example, in California, gender is not allowed to be considered when calculating auto insurance premiums.
One of the most significant factors affecting auto insurance costs is a driving record. Drivers with a clean driving record are considered low-risk drivers and are therefore charged lower premiums. On the other hand, drivers with a history of accidents or traffic violations are considered high-risk drivers and charged higher premiums.
Some examples of traffic violations that can affect your auto insurance rates include speeding tickets, DUIs, and reckless driving. So, if you want to save money on auto insurance, it’s important to maintain a clean driving record.
Type of Vehicle
The type of vehicle you drive can also affect your auto insurance premiums. Generally, more expensive vehicles are more expensive to insure. This is because they cost more to repair or replace in the event of an accident.
Additionally, some vehicles are more prone to accidents or theft than others. For example, sports cars and luxury vehicles are at higher risk of being stolen, so insurance companies charge higher premiums for drivers of these vehicles.
Believe it or not, your credit score can also affect your auto insurance premiums. Insurance companies consider credit scores when determining premiums since studies have shown that there is a correlation between credit scores and the likelihood of filing insurance claims.
The better your credit score, the lower your auto insurance premiums will be. On the other hand, if you have poor credit, you can expect to pay higher premiums.
The location you live in can also affect your auto insurance premiums. Drivers in urban areas generally pay more for auto insurance than drivers in rural areas. This is because there are more cars on the road, which increases the likelihood of accidents.
Additionally, some states have higher minimum requirements for auto insurance coverage than others. For example, drivers in California are required to have liability coverage of at least $15,000 per person and $30,000 per accident. In contrast, drivers in Texas are only required to have liability coverage of $30,000 per accident.
What is the average cost of auto insurance per month?
The average cost of auto insurance per month in the United States is around $83. However, this number can vary depending on a number of factors, including age, driving record, and location.
What factors affect auto insurance costs?
The factors that affect auto insurance costs include age, gender, driving record, type of vehicle, credit score, and location.
How can I lower my auto insurance premiums?
There are several ways to lower your auto insurance premiums, including maintaining a clean driving record, choosing a vehicle with low theft rates, and increasing your deductible.
Is it possible to get auto insurance with bad credit?
Yes, it is possible to get auto insurance with bad credit. However, you will likely have to pay higher premiums than someone with good credit.
Do I need full coverage on my car?
Whether or not you need full coverage on your car depends on your specific situation. If your car is financed, your lender may require you to have full coverage. Additionally, if your car is valuable, it may be worth getting full coverage to protect your investment.
Auto insurance costs can vary depending on a number of factors. However, by understanding these factors and taking steps to reduce your risk, you can save money on auto insurance premiums. Always be sure to shop around for the best rates, and don’t be afraid to ask for discounts or bundle your policies to save even more.