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What’s the Average Price of Car Insurance?

By August 23, 2021August 23rd, 2022No Comments

By Stacy Garrels

It’s really hard to say exactly how much you can expect to pay for auto insurance. The cost of car insurance is affected by so many factors and can vary a lot depending on which car is being insured and what type of insurance is required. Read on to find out how much you can expect to pay and how to get the best deal on your car insurance.

Average Cost Of Car Insurance

According to AA’s 2020 driving costs fact sheet, the average annual cost of auto insurance was $1202. That works out to around $100 per month. That’s just the national average cost though and the actual amount that you end up paying can actually be quite different. It’s possible to get much cheaper insurance and there are also certain factors that can make your monthly payment far higher.

What Influences The Price?

There are so many factors that can affect insurance rates and there’s no simple way to work out exactly what your insurance costs will be. The best way to find out how much car insurance will cost is to get quotes from a few insurance companies. Here are some factors that are likely to affect your car insurance cost: 

Driver Profile

Your age and gender, where you live, how much you drive, and your driving record are all factors that affect how much your car insurance will cost. Young drivers and people who live in more dangerous areas or drive a lot can expect to pay higher premiums.

Type Of Car

The type and value of your car have a big impact on your auto insurance rates. It makes sense that if your car costs more to repair or replace, then your insurance premium will be higher.


Average car insurance costs vary quite dramatically from state to state. Louisiana, Michigan, District of Columbia, Florida, and New York top the list of the most expensive states. While, North Dakota, Maine, Iowa, South Dakota, and Idaho offer the lowest average car insurance rates. According to The Insurance Information Institute, the average cost of auto insurance in expensive states can easily be double that of the cheapest states. 

Credit Score

Unfortunately, a poor credit rating can have a reasonably large impact on the insurance premium. It’s not uncommon for drivers with poor credit to pay up to 75% more than drivers with a good credit rating. 

Type Of Insurance

The type and amount of insurance coverage that you choose can make a big difference to the cost of your monthly premium. The more extensive your car insurance, the more expensive it will be. Full coverage car insurance is typically the most expensive and minimum coverage is usually the cheapest.

What Does Car Insurance Cover?

There are various types of car insurance available.  Each has its own pros and cons. It’s important not to over-insure yourself, but you also don’t want to be in a situation where you are plunged into debt and can’t afford a new vehicle because you were under-insured 

Full Coverage Car Insurance

As the name suggests, full coverage car insurance offers comprehensive cover. This type of coverage is best suited to new, expensive cars.

It typically includes collision coverage, comprehensive coverage, uninsured motorist property damage coverage, uninsured motorist bodily injury liability coverage, property damage liability coverage, and bodily injury liability coverage. 

It’s important to find out what your deductible will be and make sure you understand exactly what is and isn’t included in your insurance. There are still some costs that you could face even with full coverage insurance.

Minimum Coverage

Minimum coverage car insurance is the least amount of insurance you can legally have. What this insurance includes varies from state to state, so it’s important to find out your state requirements and make sure they meet your needs.

Your insurance company will be able to explain exactly what is and isn’t included in their minimum coverage. If you think the coverage is too limited for your situation, you can add on additional forms of insurance.

Minimum coverage typically includes bodily injury liability insurance and property damage liability coverage. Some states also require uninsured motorist insurance and personal injury protection insurance. 

There is no comprehensive and collision insurance included in minimum coverage. So, if you’re in an accident, you’ll need to pay to fix your own car.

This type of insurance is usually best suited to older, cheaper cars and drivers who can afford to fix or replace their car if it’s damaged.

Something In The Middle

Most people can’t afford to simply replace their care and will choose to add some extra insurance to their minimum coverage in case they are in an accident or their car is stolen. If you live in an area with poor weather or a large number of thefts, then you’ll definitely want some additional coverage.

What To Look For When Buying Car Insurance

Buying car insurance isn’t hard, but it’s important to understand what you need and to be willing to put in a little bit of work. Taking your time and making sure you get the best deal possible can add up to some big savings in the long run.

Decide How Much Coverage You Need

Before you start shopping around, it’s a good idea to have at least a vague idea of the type of insurance you will need. Getting quotes for similar products will save you time. If you’re not sure, then it’s worth chatting to a few insurers and finding out what products they have on offer.

Shop Around For Quotes

Once you know how much coverage you need, you can start shopping around for quotes. When you compare auto insurance quotes, remember to take note of the deductible. Some insurers will offer a really low annual premium but then charge a high deductible.  Choose a car insurance company that offers a reasonable premium with a manageable deductible.

Choose A Reliable Insurer

It’s important to choose a reliable insurer. They don’t need to be the biggest or best-advertised insurers, but they do need to have a good reputation and a stable business.

Shop For Deals And Discounts 

Shopping around for deals and discounts is a great way to save on your car insurance premiums. There are often coupons available to help you save. 

Signing up for a comprehensive rewards program like Swagbucks is a great way to find the best deals. Swagbucks is an all-in-one rewards site, so you can also earn rewards for completing simple tasks like shopping online, uploading receipts, and answering surveys. If you’re looking to save some money, then it’s a great place to start your search for the best insurance deals.

It’s Not As Hard As It Sounds

All the big words and complicated terms can make car insurance sound complicated. Luckily it’s not actually that complicated. Finding the best insurance might seem daunting, but once you start getting quotes, you’ll find it all becomes a little easier to understand.

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