I often get frustrated when I get my auto insurance bill. I’d love cheap monthly car insurance premiums, but they are hard to find. It seems like the prices keep increasing every renewal.
Rather than sitting back and letting my prices increase, I decided to take action and research the average monthly car insurance payment. By doing this I could change insurance companies if I was getting ripped off.
Unfortunately, I found out high and increasing car insurance prices are a fact of life.
Each state has vastly different insurance prices. Different coverage options and other circumstances can mean different rates, too. That said, I did find some national statistics that made me feel a little bit better.
The average monthly car insurance payment
According to The Zebra, the average cost of car insurance is $125.16 per month.
Progressive takes that a step further and breaks down the average cost of car insurance per month to three groups of states based on their premiums for their customers. This data was a bit shocking to me because the monthly costs varied by so much.
Progressive’s high-cost states pay an average monthly car insurance payment of $232. These states include California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Louisiana, Maryland, Massachusetts, Michigan, Pennsylvania, New Jersey, New York, Rhode Island, South Carolina, and Texas.
Progressive’s medium-cost states have an average monthly car insurance cost of $167. These states include Alaska, Arizona, Alabama, Arkansas, Hawaii, Illinois, Kentucky, Mississippi, Missouri, Nebraska, Nevada, Oregon, Tennessee, Utah, Virginia, Washington, and West Virginia.
Finally, Progressive’s low-cost stats average cost of car insurance per month is $137. These states include Idaho, Indiana, Iowa, Kansas, Maine, Minnesota, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Dakota, Vermont, Wisconsin, and Wyoming.
Note the prices above are a snapshot reflecting the time they were taken.
Why is the average monthly car insurance payment so varied?
It’s extremely tricky to understand the long list of items that can impact the average cost of car insurance per month. Insurance companies want to make money, so they gather a ton of data to help them assess the risk of insuring you.
Based on that data, they determine your premium. Of course, different states have different regulations on what is and isn’t allowed to be used when calculating an auto insurance rate. That said, here are some of the most common factors.
Coverage options chosen
One of the biggest factors affecting the monthly cost of your auto insurance is the coverage you choose. If you only choose the minimum required by state law, your cost will be much lower than if you select high coverage amounts and full coverage.
Coverage amounts in your policy can vary wildly. For instance, some states allow a minimum liability insurance coverage of only $10,000. That said, you can often also get policies that cover up to $500,000 of liability insurance.
You can also choose to have a variety of coverage options that aren’t necessarily mandatory. If you own your car outright, you don’t have to carry collision or comprehensive coverage in most cases.
You normally don’t have to buy rental car coverage, either. These coverage options may be valuable to you to have, but adding them to your policy will increase your premium.
Insurers have statistics that prove gender matters when it comes to claims. Men are inherently worse drivers, especially when they’re younger.
That means insurers will charge different genders different prices, and it’s women who usually have lower auto insurance costs.
Age plays a huge factor in your insurance rates. Younger drivers don’t have as much experience as older drivers. Additionally, younger drivers tend to exhibit riskier behaviors, too. For these reasons, younger drivers typically pay more than older drivers.
That said, as you get much older, rates may start to increase again. Seniors eventually have issues that cause them to get in more accidents. Whether it’s slower reaction times or having a hard time seeing, your age can increase rates late in life.
Where you live
Where you live has a huge impact on your auto insurance rates.
State laws, minimum insurance requirements, the likelihood of getting in an accident in your area, crime rates, average population statistics and more factor into this auto insurance pricing factor.
Driving and accident history
It makes sense that your personal driving history would impact your rates.
If you’ve literally never gotten into an accident or had a moving violation, you might be a much safer driver than someone who has had three accidents and two DUIs.
Years of driving experience
Today, people are waiting longer to start driving. Car insurance companies base rates partially on age. However, they also take years of driving experience into account.
If you live in a city and don’t need a car, you may not get your driver’s license early on in life. If you don’t get your driver’s license until you’re 25, you may be as risky as an 18-year-old in the eyes of some insurers.
While not all states allow credit to be factored into your insurance premiums, many do. Certain credit factors have been good predictors of whether a person will make an insurance claim or not.
For this reason, your credit can impact your auto insurance premiums. In general, the better your credit is the lower your premiums will be.
Different vehicles have different costs to insure. If you drive a massive truck, chances are your passengers are less likely to get injured in a crash. That said, your truck may cause more damage to other vehicles because of its size.
Your vehicle may also have safety features that other vehicles don’t. If your car automatically brakes before hitting something in its path, that could reduce the number of claims for that vehicle and your auto insurance rates.
Ultimately, the age, type and claim specific data about your car are all factors that influence your auto insurance premiums.
The more you drive, the more chances you have to get in an accident. As such, auto insurers often ask for your estimated annual mileage when you sign up for insurance.
Most insurers don’t make it clear how much money you save by driving less. Other car insurance companies, such as Metromile, show you exactly how much you pay per mile for auto insurance and base their rates on it.
You wouldn’t think being married would make you a lower risk to car insurance companies, but it generally does. Single people usually have to pay higher rates than their married counterparts.
Your profession can even have an impact on your car insurance rates. People who drive their personal cars as part of their job may have to pay higher rates than those who don’t.
Additionally, some insurers may view certain professions as riskier than others if the state allows it.
Affiliations with organizations
Many insurance companies partner with organizations to offer discounts to their members. Your auto insurance company may offer you a discount for being a member of your school’s alumni association or a professional organization through work.
Ask if you qualify for affiliation based discounts to see if you could start saving today.
What other insurance products you have
Insurers have many costs associated with managing insurance policies. If you have multiple insurance policies with a single carrier, some of those costs could be lowered. For this reason, you can get discounts for having many types of insurance with one insurance company.
Common discounts include having more than one car insured on one policy, having a homeowners or renters insurance policy or even having an umbrella insurance policy with a carrier.
Car insurance companies aren’t all the same
It’s important to note that two car insurance companies may have the same exact data about you but may offer different car insurance monthly costs. The fact of the matter is, some car insurance companies view your data differently and may offer you a lower premium.
Other insurance companies offer lower rates across the board because they’re better at keeping their costs low. That’s why it pays to shop around and find the best car insurance company for you. If you’re looking for a new car insurance company, here are a couple of options you may want to consider.
Metromile is a car insurance company focused on offering insurance based on how much you drive. If you don’t drive much, you could save quite a bit of money with Metromile.
They charge a low base rate plus a cost per mile rather than a flat fee each month. And, if you don’t drive much, but want to take a road trip suddenly, Metromile won’t penalize you for driving more miles.
Metromile is currently available in eight states: Washington, California, Oregon, Virginia, Pennsylvania, Illinois, New Jersey, and Arizona.
Allstate is one of the major car insurance companies in the United States. Due to their size, they can often offer competitive rates to their customers.
Since every car insurance company assesses risk differently, you may be able to save money by switching to Allstate. Get a car insurance quote from Allstate today to find out if you could start saving money.
Savvy isn’t an insurance provider; they shop rates from a wide range of insurers to help you find the best rate for car insurance.
Here’s how it works: you get a quote without having to start from scratch with each insurance company you are checking out. You simply select your current insurer from a list, input your username and password, and wait for Savvy to do their thing to get you the best deal.
The average car insurance monthly cost is about $125 per month. However, your cost could be much higher or lower depending on your specific situation and where you live.
To see if you’re getting a good deal on your auto insurance, get price quotes from several reputable car insurance companies. Compare the quotes then pick the best option for you.