Factors that impact the cost of car insurance
To get the best auto insurance rates, it’s helpful to understand what factors insurers use to determine your premium. Here’s several variables that will determine how much you pay for auto insurance.
Types of auto insurance you include in your policy, including optional coverages.
Coverage limits you choose.
Auto insurance deductible amount you choose, when applicable.
Your age.
Your gender (except in California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania).
Your location.
Your car insurance claims history.
Your car insurance history.
Your credit-based insurance score (except in California, Hawaii, Massachusetts and Michigan).
Your vehicle.
Average annual car insurance costs based on vehicle type
The type of vehicle you drive directly impacts how much you’ll pay for car insurance. Here are average annual rates from our top-scoring insurers for popular vehicle makes and
Quadrant Information Services. Rates are based on a female driver with a clean record with $100,000 in bodily injury liability coverage per person, $300,000 per accident and $100,000 in property damage liability, uninsured motorist coverage and any other coverage required in the state. The rate also includes collision and comprehensive with a $500 deductible.
How to save money on car insurance
Here are some things you can do to find cheap car insurance:
Take advantage of car insurance discounts. Ask your insurer about car insurance discounts, like good driver discounts and bundling home and auto insurance.
Participate in usage-based programs. These programs track how you drive, so you may score lower rates if you drive safely or infrequently, depending on the program.
Drive safely. Drivers with a good record and no traffic violations tend to see lower rates.
Go claims free. Your insurer may offer cheaper car insurance rates if you go claims-free for a certain number of years.
Keep your credit score up. Insurers factor in your credit score when determining how much you’ll pay. The better your credit score the cheaper your car insurance may be.
Choose a higher deductible. If you raise your car insurance deductible you’ll see lower rates, but your claims payout will be smaller.
Shop around. Make a list of auto insurance companies that you’re considering and then get and compare car insurance quotes. Do this regularly, such as once a year, to make sure you’re getting the best car insurance rates for your needs.
Usage-based car insurance programs and your rate
If you participate in a usage-based car insurance program (UBI), how often and how safely you drive your car can be factored into your rate. UBI programs are offered by several insurers and often result in a discount for good driving habits.
UBI car insurance programs require the drivers to use a device plug-in or app to collect telematics data, which insurers then use to determine your rate. The UBI app or plug-in tracks several metrics, including your speed, mileage, hard braking, acceleration and more. The safer — or more infrequently — you drive, the lower your car insurance rates may be.
Types of car insurance
Most states require motorists to purchase liability car insurance, but depending on where you live and whether you finance your vehicles, you may be required to purchase other types of car insurance. Here are the most common types of car insurance to consider.
iability car insurance
Liability car insurance covers costs incurred by other drivers and their passengers if you’re at fault for an accident, as well as your legal defense and any judgments or settlements if you are sued. It is broken down into two parts:
Bodily injury (BI) liability covers the cost of medical care and related expenses incurred by the other driver, their passengers or a pedestrian injured in an accident you caused. It can also cover your legal expenses if you’re sued after an accident.
Property damage (PD) liability covers the cost to repair or replace another individual's property, such as their vehicle, that was damaged after an accident you caused.
Some level of liability insurance is required in every state except New Hampshire and Virginia. Even drivers in those states may find they still need coverage in certain situations.
Uninsured motorist/underinsured motorist insurance
Uninsured motorist (UM) insurance covers you and your passengers if you’re injured in an accident caused by an uninsured driver or if you are the victim of a hit-and-run. In some states, uninsured motorist insurance may cover the cost to repair or replace your vehicle if it was damaged in an accident caused by an uninsured driver.
Underinsured motorist (UIM) insurance offers similar coverage if you’re in an accident with a driver who doesn’t carry enough insurance to cover accident-related costs.
UM coverage is required in some states, but many insurance experts highly recommend adding it to your auto insurance policy even if it is not required in your state.
Collision car insurance
Collision insurance
There are no states that require collision coverage, but your lender or lessor may require it if you finance your car. It is typically bundled with comprehensive car insurance.
Comprehensive car insurance
Comprehensive car insurance
Like collision coverage, comprehensive car insurance isn’t required at the state level but is often necessary if you finance your vehicle.
Your coverage needs to change over time. Find out when it makes sense to drop collision or comprehensive coverage
Personal injury protection
Personal injury protection (PIP)
PIP is usually required in “no-fault” or “choice no-fault” states and unavailable in others.
Medical payments coverage
Medical payments coverage, commonly called MedPay, covers accident-related medical bills for you and your passengers, regardless of who is at fault. This can include the cost of doctor visits, ambulance services, X-rays, surgery and funeral fees.
MedPay, which is required in some states, is similar to PIP, but coverage is limited to medical expenses. It will not cover lost wages or replacement services.
Gap insurance
If you finance or lease a vehicle and it’s totaled in an accident (or stolen), gap insurance covers the difference between the market value of your vehicle and the actual balance on your auto loan. Though there are no laws that require you to carry gap insurance, your lender or leasing company may require it.
How much car insurance do you need?
How much car insurance you need will depend on:
The minimum amount of car insurance required by your state. This information should be available on your state’s Department of Motor Vehicles or Registry of Motor Vehicles. You can also check out our guide to car insurance needs and requirements.
Coverage requirements that are part of a finance or lease agreement. If you lease or finance your vehicle, your lender or lessor will likely require you to carry full coverage car insurance (which includes liability, collision and comprehensive coverage) up to a specified limit.