How much does car insurance cost?

The average car insurance rates in the U.S. are $131.42/mo. Car insurance rates depend on the driver, state, and coverage. Use our quote comparison tool to find the lowest car insurance rates.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jun 12, 2020

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Here's what you need to know...

  • The average premium for car insurance is approximately $1,577 per year
  • Insurance costs and minimum requirements vary greatly between states
  • Your age, gender, and marital status will most likely influence how much you pay for coverage

In terms of cost, car insurance rates are more adaptable than most people realize. In the United States, car insurance prices vary according to the state policy and the terms of the provider.

Compare car insurance quotes with the free rate tool using your zip code now!

In order to protect pedestrians and property, most states also require liability insurance, which acts as a cover to mitigate third party damages.

Before investigating the cost of car insurance, it is necessary to get basic information on the policies of individual state car insurance rates and regulations.

Car Insurance Law Varies

Depending on where you live, your state may not require specific types of car insurance, or may require different amounts of coverage than another state.

In New Hampshire, for example, local authorities do not require motorists to obtain liability insurance. In contrast, drivers in Virginia can opt to pay $500 per year instead of buying liability insurance.

However, you are still required to meet the financial responsibility laws, so this isn’t an affordable option for everyone.

Liability insurance covers all third-party expenses which the driver has to pay.

So if you can’t afford to shell out thousands of dollars due to an accident you cause, you should opt for insurance coverage instead. 

The cost of car insurance is dependent on many factors. For example, coverage for male drivers is usually high due to the statistically higher aggressive driving nature of men.

Age and vehicle conditions are just a few other important factors in determining the final quote of car insurance. In the last two years, car insurance premiums have declined to compensate for high unemployment rates, which were making it difficult for average American to pay.

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Car Insurance Statistics

According to statistics, the average premium for car insurance is $1,577 per year. This figure is less than corresponding figures for 2009, where average premium were around $1,700.

Interestingly, the cost of car insurance is two and half times higher in New Jersey than Iowa.

This trend is consistent in Northeastern and Southern United States, where car insurance is relatively very high as compared to Central regions.

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For example, car insurance is around $2,500 in New Jersey while it is only $1,000 in Iowa.

Perhaps, the most expensive premiums are in the Tri-State area and New England states. In these territories, the cost of car insurance is as much as 39% higher than the national average.

In New Jersey, Rhode Island and New York, premiums can be nearly 40% higher than the national average.

In contrast, premium policies differ in the northeastern United States where Maine, Vermont, and New Hampshire share similar policies in enacting lower insurance costs, which are surprisingly 20% lower than the national average.

One of the reasons for comparing such statistics is to remind readers how the cost of car insurance may fluctuate just a few miles across the state border.

Another important aspect to consider is the fact that car insurance premiums do not remain stagnant, but continue changing every month.

Although, these changes may not be significant, they demand that consumers be aware of different factors contributing to insurance costs. Savvy consumers know how to manipulate these factors to their advantage.

Some of the most important factors are listed below.

Factors Affecting Car Insurance Rates

There are certain factors that are standard for all drivers. These include:

How to Reduce Car Insurance Rates

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Generally, areas with lower traffic have low premiums.

It is one of the reasons for the significant difference in insurance costs between two bordering states such as New York and New Hampshire. Likewise, a luxury car with accessories will be more expensive to insure than a low-priced car.

It is also important to check policies of rival insurance companies, as some of these companies may give higher insurance quotes due to past traffic violations.

Other contributing factors may include:

  • Driving distance to work
  • Number of miles driven every year
  • Potential use of the vehicle
  • Safety systems

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Compare Insurance Companies

Due to a range of factors, it is always prudent to compare car insurance companies.

A large company does not mean that it has the best insurance policy. It is recommended that drivers not rely on just two or three quotes, but try to lower price by comparing multiple insurance companies.

You can utilize the service of websites like this one that offer car insurance quotes from multiple sources.

Use our FREE quote tool below for access to car insurance rates from multiple companies today!

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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