When shopping for car insurance, it pays to understand average prices as well as how insurance costs are calculated. Car insurance rates vary widely based on many factors related to the driver and vehicle being insured. Every company uses a different formula to calculate rates, meaning car insurance quotes won’t be the same from insurer to insurer. Different drivers will find the lowest rates with different companies, which is why it’s important to compare car insurance quotes before purchasing a policy.
Let’s take a look at some factors that car insurance providers commonly consider when setting rates.
Teen drivers and young drivers under the age of 25 typically get charged more for auto insurance. Drivers will start to see lower rates after the age of 25. Rates tend to decrease until around age 50.
A better credit score can net you better car insurance quotes in most states. California, Hawaii, Massachusetts, Michigan, and New Jersey have banned the practice of using credit scores to determine auto insurance rates.
Every state has minimum coverage requirements, but drivers can always purchase more than the state-required coverage. Higher policy limits and more add-ons will increase your premiums compared to basic liability insurance.
Collision and comprehensive car insurance policies typically come with a deductible you must pay before the insurer will reimburse claims. The higher this deductible, the lower your monthly premiums will be.
Drivers with clean driving records receive the lowest rates. Speeding violations, at-fault accidents, and DUIs can drastically increase your rates. However, your rate won’t increase the same amount with every provider, so compare car insurance to find the best option.
In some states, men pay more for car insurance than women. In other states, women pay more than men. California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania have banned insurers from setting rates based on gender.
Every state has different insurance regulations and requirements. Premiums are also different from city to city. If you live in a ZIP code with high car accident or theft rates, expect the auto insurance rates to be higher.
The more you drive, the higher your rates may be. People who don’t drive often are typically eligible for low-mileage discounts. You may see a low-mileage discount on a car insurance quote, or you may need to call an agent and submit an odometer statement.
The value, safety ratings, and theft rates for your vehicle may influence your rates. Expensive cars are more costly to replace and therefore will have higher collision and comprehensive premiums. Cars more commonly involved in accidents or that have high theft rates are also more costly to insure.
The quickest way to compare car insurance from several insurers is to use a price comparison tool like the one below. A price comparison tool will only provide estimates, but it’s a good way to begin shopping for car insurance.