The average cost of full car insurance in the USA is $1,771 annually or around $148 monthly.
These rates are for full coverage together with liability, collision, comprehensive, and any extra insurance your state demands drivers to have.
The price of minimum coverage is about $545 annually. Various individual factors may affect car insurance premiums, so the real cost you will get may be different.
Your location, driving history, car model, and coverage you choose will determine your own insurance rate. Here is what you need to consider.
1 How Much Does Car Insurance Cost?
We have already mentioned that the typical cost of auto insurance is $1,771 per year.
However, this is just an average sum for a typical good credit holder. If the driver’s credit history isn’t good enough, they may face higher rates.
The general rates depend on numerous factors, including credit history and the type of coverage a driver selects.
National typical auto insurance rates for policies with full coverage are:
● $1,771 for drivers with excellent and good credit.
● $2,792 for drivers with low credit.
● $2,462 for drivers with good credit and an at-fault accident.
● $3,139 for drivers with good credit and a recent DUI.
National typical auto insurance rates for minimum demanded coverage are:
● $516 for drivers with excellent and good credit.
● $973 for drivers with low credit.
● $862 for drivers with good credit and an at-fault accident.
● $1,134 for drivers with good credit and a recent DUI.
Consumers often seek guaranteed credit cards with no deposit, but you need to keep in mind that every credit card issuer may have certain demands to follow before they issue unsecured cards to applicants.
Getting a credit card may be a decent option for people who aim to build their credit. When your credit is in good standing, you will be able to qualify for cheaper rates on car insurance.
2 How Driving Record Affects the Cost of Car Insurance
Drivers who have an at-fault accident on their record usually have to pay 42% more for auto insurance in comparison with drivers whose record is clean.
Drivers with a DUI conviction even need to pay about 93% more on average. High-risk drivers face higher premiums.
● At-fault accident. This accident may be the reason for raising the monthly full-coverage auto insurance payment from $148 to $210. As a result, the yearly premium will be up by 42%. The driver might be able to avoid this surcharge in case he or she has previously added optional coverage such as accident forgiveness.
● Speeding ticket. This is another widespread driving infraction. It may boost premiums by 21%. The rates after getting a speeding ticket may vary for each insurance carrier. For instance, USAA and Erie’s common insurance rates are about $1,400 annually, even after a speeding ticket conviction.
● DUI conviction. Your monthly full coverage premium can be increased to $300 if you are convicted of a DUI. It may also remain on the driving record for about 10 years. Each state determined the sum that will be surcharged in this case. The typical cost of auto insurance after a DUI will be about $5,530 annually in Louisiana and around $3,539 in Kentucky.
The Report on Auto Insurance: State Regulation Affects Cost and Availability, published by the United States General Accounting Office states that the effect of prior approval rate regulation changes with the degree of urbanization.
Prior approval regulation lowers the premium-to-loss ratio by 3.7 percent in states where 20 percent of the miles traveled are in urban areas.
In states where 75 percent of the miles traveled are in urban areas, prior approval lowers the premium-to-loss ratio by around 13.7 percent. A no-fault law lowers the premium-to-loss ratio by 6.7 percent.
3 What Can Affect Your Car Insurance Price
The vehicle type, driving record, age, and gender, as well as state demands, may affect the car insurance premium.
The insurance history of the driver plays an important role. Lower rates are generally offered to drivers with continuous auto insurance for quite a while.
The coverage choice also has an essential effect on the rate you get. The rates will be higher if the driver opts for lower deductible levels or higher liability limits. Besides, annual mileage is also significant.
Drivers who drive for a longer time have more chances of getting into an accident. Lower rates are offered to drivers with fewer miles per year.
The recent publication Measuring Price Change in the CPI by the U.S. Bureau of Labor Statistics states that the motor vehicle insurance index is a component of the private transportation index.
This index is included in the transportation group of the Consumer Price Index (CPI).
The motor vehicle insurance index covers liability and physical damage, as well as miscellaneous insurance coverage for private passenger cars.
The relative importance of an item category is its percentage of the CPI weight as of December of the most recent year.
The relative importance of private transport was 17.404, new and used motor vehicles – 9.218, and motor fuel – 3.822 as of December 2021.
4 Tips for Finding the Cheapest Insurance Price
You don’t need to break the bank in order to purchase auto insurance. There are certain options to save on your insurance and find the cheapest price.
One of the easiest ways to reduce your premium is to get a discount. You may be offered a discount at several major auto insurance providers.
Here is a list of the most widespread insurance discounts in the USA.
● Good student discount. Car insurance premiums can be boosted by adding a new driver. Young drivers can be offered a discount at a number of car insurers provided that they have good grades in college or high school.
● Claims-free. If a driver doesn’t have any auto claims and their record is clean for a period of up to 5 years, he or she may qualify for this discount. It may be safe driving or a claims-free discount.
● Paying in full. Can you afford to cover all costs of your auto insurance premium? Then you may obtain a discount on the total cost.
● Telematics program. If a driver has safe and great driving habits, he may be offered a telematics program. In this case, the driving habits will be tracked with a relevant app, and rewards will be offered.
The Bottom Line
Summing up, although you may know the average cost of car insurance across the country, you may be offered a different amount.
The driving history, the coverage you select, the car model, as well as your location may define the exact rate of your own car insurance.