Auto Insurance: How much does it cost on average

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There’s no denying that the cost of car insurance has gotten higher in the years. Many factors have contributed to this, just like the cost of gas prices are touching the moon. But to get an idea of how expensive auto insurance is, we need to look at the average cost of car insurance from all the fifty states in the US. It is worth noting that the average cost might not be accurate for your auto insurance because of the many factors that affect auto insurance rates.

 

In some states, auto insurance is offered at sky-high prices, while in some offers it can be bought at rock-bottom prices. To bridge the gap between the sky and the rocks, we’ll try to bring it down to the surface level. The average cost of auto insurance also requires the understanding of important factors that affect the cost. So let’s get started.

 

Types of Auto Insurance

The type of auto insurance you get affects the cost a lot, and there are so many types you can get as well. The cost also depends on the state you live in because different states have different auto insurance laws. Some states are okay with you having just basic liability coverage, while other states want you to be prepared for any form of damage, including personal, property, therapy, etc.

 

Based on these factors, there are two types of auto insurance policies you can get; Minimum coverage and Complete Coverage. As the name suggests, the minimum coverage is the absolute minimum coverage mandated by the state to carry, while complete coverage ensures total coverage for your car against all the possible ways it can be damaged.

 

Average Cost of Minimum Coverage

Since different states have different laws regarding what are the coverage limits, the average cost can be very different from the rates you’ll have to pay. For example, New York requires individuals to have the most number of auto insurance policies in the minimum coverage, making it one of the most expensive states for auto insurance. Similarly, Alaska has a required coverage of 50/100/25 (in thousand dollars) for injury and property damage coverage, which is the highest in the country.

 

So considering all the factors, here’s the average cost of minimum coverage:

 

 

Company Annual Rate Monthly Rate
Geico $1,250 $105
All State $2,420 $200
USAA $1,200 $100
Nationwide $1,360 $110
Progressive $1,550 $125
Erie $1,300 $110
American Family $1,600 $135

 

This is not an exhaustive list. Considering some other factors, here’s the list of states with the highest and lowest insurance coverage rates:

 

States with Highest Insurance Coverage Rates

  • New York
  • Florida
  • Michigan
  • Nevada
  • Louisiana

 

States with Lowest Insurance Coverage Rates

  • Ohio
  • Vermont
  • Maine
  • Idaho
  • New Hampshire

 

Additional Coverage

Minimum mandated coverage is the cost of just the liability insurance along with a few extra coverages such as uninsured/underinsured coverage, personal injury protection coverage, etc. The cost of complete auto insurance can go very high with the addition of two more insurance coverage; Collision insurance and comprehensive insurance coverage. While these two are not mandatory insurance, it is as important as liability insurance.

 

Collision insurance is the most popular optional coverage and it costs almost as much as liability insurance. This insurance policy covers your car from any accidental damage caused by you. So if you hit a car or a tree or a light pole, any accidental damage caused by you will be covered. However, the fine print might contain some terms and conditions based on different companies.

 

Comprehensive insurance is the auto insurance coverage against natural calamities such as hurricanes, earthquakes, riots, hailstorms, or even some other car hitting your car while it is parked. Any damage to the car that is not your fault will be covered under the comprehensive insurance policy. A comprehensive insurance policy is not that expensive, averaging at around $300 to $400 for almost all the companies.

 

In some states, it might be mandatory to get uninsured/underinsured motorist coverage which covers the cost of damage repair (both personal injury and vehicle damage) in the case when the other person who hit you either do not have enough limit to cover the costs or does not have liability insurance at all. These insurances are also very costly and cost similar to liability insurance.

 

What Affects Insurance Cost

Understanding the average cost can help you estimate how much you’ll be spending to insure your vehicle. But it could be slightly misleading as these are average numbers, and one thing to know about auto insurance is everyone gets a different insurance quote, even from the cheapest car insurers.

 

Multiple factors affect your insurance costs, and if you want to save some money, then understanding these factors will help you a lot.

 

Driving record: An impactful factor in deciding the insurance rates is your driving record. A clean and good driving record will get you lower insurance prices.

 

Credit score: Except for a few states, most of the states consider your credit score while deciding the price of auto insurance policy and premium rates. A better credit score will get you lower premium rates.

 

Locality or area: Where you drive or keep your car could also increase or decrease your insurance cost. Areas with a higher rate of theft, accidents, etc will increase the cost of insurance and premium costs.

 

Security features: If your car comes with security features such as ABS, anti-theft lock, better safety rating, etc, you’ll get lower insurance rates. It is because the chances of a safer car getting damaged or stolen are low.

 

And that was it, all about the average auto insurance cost in the US and the factors affecting it.