Wondering the answers for “what should I be paying for car insurance”? It depends on a variety of factors, including your state, your driving history, and more. If you are one of those who has no idea about how much an auto insurance policy costs on average, then you have come to the right place.
Here we will discuss how the cost of a car insurance policy is determined. Not only will we tell you about average costs in different states, but we will also give an overview of what factors can affect the premiums of your policy and how you can cut them with a few smart moves.
Further in the article, you will get the answers for what should I be paying for car insurance and rates that differ across states.
Average auto insurance national cost and rates according to states
Before we talk about what is the average cost according to the states, let’s see what is average national cost. The answer to this question is diverse. Some say it is around $1,621, and some debate that it is $1,502 per annum. Whatever it be, one thing is certain that the actual average amount is between $1,500 to $1,700 per year.
It means that a person would be paying between $125 and $142 per month for an auto insurance policy. This average national cost is accumulative of only primary car insurance that is legally required to drive on the road. If you add other policies as well, you may have to pay extra bucks for that.
As of now, we disclosed, average national cost. Let’s look at the most expensive and cheapest states when it comes to buying car insurance.
According to the available data, we found out that Maine has the cheapest insurance rates with an average of $900 per year. Apart from that, Idaho and North Carolina are also affordable states for auto insurance. However, if we consider only legal coverage, Wyoming takes the bet with an average of no more than $315 per annum. Moreover, Dakota and Iowa also stand along the lines with Wyoming to offer the cheapest auto insurance policy.
If we are to talk about the most expensive states of the US, then Michigan stands at the top with an average of $4,000 per year. It means that a regular native of Michigan pays around $333 each month. On the second and third position comes the famous New York City and Louisiana. However, both of the states have way cheaper rates than Michigan.
What factors affect premium rates in general?
Above, we only talked about the average national cost and rates according to states. Here we will review how the individuality of each citizen can affect their cost of auto insurance.
Age of the driver
There is a simple formula. If you are too young or too old, your premiums would be higher compared to a person who is at the peak of adulthood with a clean driving history. The reason behind this is that young and too old drivers are prone to more accidents.
Your driving history
When you go for auto insurance, the company verifies a minimum of five years of your driving history before giving you a quote. It is because the driving history tells about how safe or reckless driver you are.
The credit scores indicate your reliability and your ability to pay on time. If you have a good credit score, you may expect lower premiums than those with a bad score. However, to your surprise, a few states ask insurance providers to disregard this aspect.
Type of vehicle
It is a common fact, the expensive your car is, the more premium you will have to pay to protect your asset. However, this is the case if you are buying comprehensive and collision insurance as well.
The time you spend on the road
If you are on the road more often, then be ready to pay a higher amount of insurance rates, because when you are on the road, you become more prone to collisions and crashes compared to those who use their car for leisure or doesn’t drive much.
Coverage you need
If you opt for legal coverage only, then your rates would be relatively lower than the person who has opted for multiple coverages including collision and comprehensive coverage.
How to cut down auto insurance cost?
Last but not the least, now we are going to tell you how to reduce your cost smartly. If you have more than one car, include all of them into one policy. Moreover, keep a vigilant eye on discounts and take a defensive driving course for a better off. Apart from that, keep your driving history clean, never let your credit score drop, get multiple quotes for lower premiums, and increase your deductibles.
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