Estimating car insurance costs: what to expect
Whether you're looking to quickly calculate insurance costs before buying a new vehicle or simply determining if you're paying too much, our handy tool will give you a rough estimate of auto insurance costs based on your age, location, insurance status, and homeownership.
However, the most accurate estimate will always be a car insurance quote, which accounts for more factors like the type of car you drive and your annual mileage. That's why we provide the option to obtain a formal quote after your initial estimate.
Alongside our calculator, we've put together the following guide to help you find fair car insurance rates.
Key takeaways
- Insurance calculators are a good starting point, but comparing quotes from multiple companies will give you the most accurate estimate (as well as get you the best rates!).
- Every insurer has its own underwriting process, meaning quotes will vary widely from one company to another.
- Your rates can vary by location, driving history and the car you drive.
- In 2024, the estimated monthly rate for car insurance was about $147 or $880 for a six-month policy.
Tips for getting an accurate estimate
- Provide accurate information. It's crucial to provide accurate information, whether you use a calculator or get a formal quote from a comparison tool. Customers are often shocked at how much details they perceive as "small" affect their final rate.
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Take time to understand your coverage options. Choose the ones that best suit your needs and budget and don't skimp on coverage to save money up front.
- Take the next step and get a quote! We aren't saying this just because we're an insurance comparison site: an insurance quote provides more personalized, accurate pricing as it considers more factors.
"Insurance calculators are designed to provide quick, generalized estimates. This is why people often see a discrepancy between a rough estimate and a more detailed quote. Calculators are an excellent starting point, however, they're just not as accurate as a quote from our comparison engine or one finalized by one of our agents."
How car insurance premiums are calculated
Car insurance companies consider various factors in a driver's profile to determine rates, some within their control, like good driving record or driving an affordable car to insure.
Rates are influenced by location, age, gender, marital status, credit score, vehicle, and driving history. Lower risk results in lower premiums. Let's explore these rating factors and their impact on your car insurance premium.
Demographics and auto insurance rates
Insurance companies assess applicants' age, gender, credit score, marital status, and homeownership status to gauge risk and assign appropriate insurance rates.
Credit score
In states permitting it, your credit history can impact premiums. Higher scores often mean lower rates, as data suggests drivers with poor credit file more claims than drivers with better credit.
Age
Teens and seniors face the highest premiums given their elevated accident risk. Comparatively, drivers aged 25-60 typically enjoy cheaper premiums.
Marital status
A driver's marital status affects premiums, given industry data shows single drivers face higher injury likelihood than married ones. Additionally, spouses are typically required to be listed on their partner's insurance which can result in lower or higher premiums depending upon their driving record.
Gender
Gender affects young drivers more than experienced ones. On average, male teen drivers pay $754 more annually in premiums than female teen drivers, reflecting insurers' perception of higher risk among young males. Historical data supports this, with male drivers experiencing over twice the number of accident fatalities compared to females almost every year from 1975 to 2021.
Location and car insurance rates
Auto insurance is regulated by each U.S. state and priced based on the ZIP code in which a driver resides. If a state requires its drivers' basic minimum coverage to be high, its residents may face higher insurance costs.
Location
Car insurance rates vary by ZIP code to account for external rating factors. ZIP codes with more drivers or risks like floods, wildfires, vandalism, or theft tend to have higher premiums. Often, drivers in rural areas have cheaper rates compared to their urban counterparts.
Additional coverages required by the state
In no-fault states like Florida, drivers must rely on their own insurance provider to cover medical expenses and related costs regardless of who is at fault in an accident. Accordingly, they are required to carry high levels of personal injury protection (PIP) coverage, which can dramatically raise your premium.
Insurance and driving history and insurance pricing
Insurance companies prefer to insure drivers with reliable insurance histories. A lacking or incomplete insurance record can be a red flag to an insurance company. Insurance companies see drivers with a long history of high insurance limits as financially responsible, and therefore less of a risk than a driver without a positive insurance history.
Driving history
Car insurance companies see a driver's past as an accurate predictor of their future performance. A history of tickets or violations will inflate the cost of current and future insurance premiums.
Vehicle choice
New sports cars will have higher insurance rates than old Civics because replacing their parts is more expensive. Additionally, insurance providers may take car ownership status into account as well, and rate based on whether your vehicle is owned, financed or leased. Find car insurance rates by vehicle type.
Insurance history
Unless you are a brand new driver, insurance companies see a lack of continuous coverage as an indicator of higher risk. In an insurance company's estimation, if you were licensed but didn't have insurance, you may have been driving while uninsured.
Coverage levels and insurance pricing
The more coverage you carry, the more expensive your premiums will be. The cost difference between the lowest levels of car insurance coverage and the highest can add up to more than $1,000 annually. The reason for this is simple: if you carry more coverage, your insurance company is obligated to pay out to meet a higher coverage limit.
Liability only vs full coverage
Full coverage insurance includes comprehensive and collision protection, which is not typically included in a liability-only policy and therefore means higher premiums for these additional coverages.
Deductible amount
Your insurance premium will vary based on which deductible you select. Choosing a higher deductible will make your premium more affordable, but you will have to pay more out of pocket if you get into an accident.
How to calculate how much car insurance you need
Determining how much car insurance coverage you need depends on various factors such as your state's minimum requirements, your vehicle's value, your financial assets, your risk tolerance, and, when applicable, your lender. It's important to consider coverage for liability, collision, comprehensive, uninsured/underinsured motorist, medical payments, and personal injury protection. See our generalized reccomendation below.
How to save on car insurance premiums
While rating factors do exist and are difficult to change, there are a few steps you can take to make sure you are getting the best rate possible for your situation.
Insurance comparison websites compare rates from hundreds of companies, taking your unique needs and rating factors into account. Getting quotes from several different insurers allows you to see which company can offer you the lowest rate for your situation, saving you time and money.
Typically, cars with lower costs of repair, moderate engine power, good safety ratings, and less susceptibility to theft tend to have cheaper insurance rates. In other words, opt for a gently used, reliable vehicle instead of a new shiny Camaro or BMW. See our guide to the cheapest vehicles to insure for ideas.
If you require additional insurance such as homeowners, renters, or mobile home insurance, combining it with your auto coverage can reduce premiums. Multi-policy discounts, particularly for homeowners, can lead to significant savings.
Most insurance companies provide a list of possible discounts to reduce your premium. Knowing which discounts you qualify for can help you avoid higher premiums.
One of the simpler rating factors you have control over, practicing safe driving habits and avoiding violations can improve your driving record and lower your risk profile, resulting in lower premiums.
Like your driving record, your credit score is one rating factor that is within your control. Paying bills on time and increasing your credit score will lower car insurance rates.
If you are a safe driver or trying to improve your record, many companies offer usage-based telematics programs. With these programs, your driving habits are tracked by either a mobile app or an installed GPS device in your vehicle. By tracking how you drive, companies are able to offer discounts on your next policy period if you have proven to be a safe driver.
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