If you’re in the market for auto insurance, you probably have a lot of questions. One of them is probably how much car insurance costs. The answer depends on several factors. Knowing how insurance providers calculate auto insurance premiums can help you not only budget but also save money because you know what to avoid in the future.
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Factors that affect the average cost of auto insurance
1. The type of auto insurance policy
The types of car insurance you purchase play a huge role in determining the cost. A state minimum liability policy is likely to cost less than an auto insurance package that includes comprehensive insurance, collision insurance, accident forgiveness option, and personal injury protection.
2. Your age
Drivers of different age groups present different risks, so premiums often differ depending on the age of the insured.
3. Your location
Geography, climate, and population density affect the price of your car insurance.
4. Your driving history
Insurance providers want to see responsible behavior from drivers, which is why traffic accidents and citations are factors that determine auto insurance premiums. Keep in mind that penalties on your driver’s license are not recorded forever, but the length of time they remain on your driving record varies depending on the state you live in and the severity of the violation.
5. The type of car you drive
The price, model, and age of your vehicle determine the cost of your auto insurance. For example, a new sports car is likely to cost more than a five-year-old sedan.
6. Your deductible
If you choose a lower deductible, your insurance bill will be higher, so we conclude that choosing a higher deductible seems like a pretty good idea. However, a higher deductible could mean more out-of-pocket costs in the event of an accident.
7. The limits of your policy
Although all car insurance policies have a minimum amount, you can also raise the limits of your policy depending on the level of protection you want.
8. Your eligibility for discounts
Nationwide offers several discounts on auto insurance. You can save money on your monthly bill by bundling policies, opting for paperless billing, driving responsibly for an accident-free history, and much more.
9. Change of residence
Even if your new home is just a block away from your old place, if it’s a different ZIP code, your auto insurance rate could change. Auto insurance policies also vary in price by state.
How much does the average car insurance cost?
How much does car insurance cost on average? There are a lot of factors that affect that cost, making it difficult to get an accurate idea of what the average person pays for car insurance. According to the American Auto Association (AAA), the average cost to insure a midsize sedan in 2020 was $1,245 yearly, or about $104 a month. 1 Please note that these amounts are approximate and based on data collected at the national level; Depending on your particular situation, those numbers could be higher or lower.
Nationwide not only offers competitive premiums but also a variety of discounts to help our members save even more, including on usage-based insurance. Members can join the Nationwide SmartRide and SmartMiles usage-based insurance programs to earn discounts for safe, low-mileage driving.
How much does car insurance cost in my state?
Insurance costs vary by state. If you’re a Florida resident, you’ll pay the highest average rate in the country to fully insure your vehicle, approximately $2,587. Maine residents are on the other side of that spectrum, averaging a full coverage rate of just $831. 2
Why is there such a large disparity in average costs? There are several factors at play. Prices are affected by several state laws, from rules on the rates insurance companies can charge 3 to policies that affect the cost of health care. General conditions in a state, such as weather trends or the prevalence of insurance fraud, can also influence prices. 4 See a complete list of fees by state.
The most and least expensive cars to insure
Average insurance costs differ from model to model, and certain types of cars are significantly more expensive to insure than others.
Size is a distinguishing factor between the most and least expensive cars to insure. Larger and smaller vehicles are considered less safe, as small vehicles are more vulnerable to damage and large vehicles are more likely to cause damage. The least expensive cars to insure are usually somewhere in the middle of the size spectrum, often mid-size sedans and utility vehicles (SUVs).
Any car that qualifies as a sports car or luxury car is on the higher end of cost. These cars are more expensive to repair if damaged and are statistically more likely to be driven fast. The likelihood of them being stolen can also influence the average car insurance rate. Vehicles with parts that are in high demand are common targets for thieves and will therefore cost more to insure. 5
How to estimate car insurance
If you know how to estimate car insurance before purchasing one, you’ll be much more prepared when it comes time to sign on the dotted line. The best way to do this is to simply compare quotes until you have a good idea of the approximate cost you will pay. But first, you’ll need to consider the factors that will determine those quotes.
The minimum rates in your state determine the basic coverage you’ll need to get by law, so determining them will give you a good starting point. Decide the type of car you are going to buy, its size, features and cost. The cost of insuring your car is influenced by everything from its safety features to the statistical probability that vehicles of its model will be stolen.
That means the more you can decide before looking for quotes, the better. Once you’ve figured out this information, look up those quotes and make side-by-side comparisons. Be sure to include the same amount of coverage in each quote so your comparisons are accurate. 6
How do I get car insurance?
Getting an auto insurance estimate from Nationwide has never been easier. Get a free auto insurance quote today. Simply enter your zip code to begin the auto insurance quote process. In just a few minutes, you’ll have an auto insurance estimate based on your specific conditions. You can also talk to a Nationwide agent and get a quote over the phone.
