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Factors that affect car insurance rates include your age, driving history and marital status and details about your vehicle, such as its model year
How Much Full Coverage Car Insurance Cost
Written by: Heidi Wallis Written by: Heidi Wallis Contributor Heidi is a writer based in Virginia City, Nevada with more than 15 years of experience producing content in the insurance space for companies such as Allstate and Esurance. Heidi is an authority on auto insurance.
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Edited by: Rashawn Mitchner Edited by: Rashawn Mitchner Managing Editor Rashawn Mitchner is a Guides team editor with over 10 years of experience covering personal finance and insurance topics.
Car insurance does not cost the same amount for everyone. There are many factors that affect car insurance rates, including your personal information and details about your vehicle. We at the Guides team explain 10 of these factors and how you can get a lower rate. We also recommend two of the best car insurance companies so you can get a policy from a reputable provider.
The Guides team is committed to providing reliable information to help you make the best decision possible about insuring your vehicle. Because consumers rely on us to provide objective and accurate information, we have created a comprehensive rating system to formulate our ranking of the best car insurance companies. We collected data on dozens of car insurance providers to rank the companies on a wide range of ranking factors. After 800 hours of research, the end result was an overall rating for each provider, with the insurers that scored the most points on the list.
Many factors go into determining car insurance costs. Some, such as location, vehicle type and driving history, are fairly straightforward. Others, like credit history and marital status, can be a bit more surprising.
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The age and type of vehicle you drive will affect the cost of car insurance. Insurance companies consider the average cost of claims for different types of vehicles when setting rates. More expensive vehicles with new technology and advanced safety features cost more to repair or replace, so they usually cost more to insure.
So that means a newer, more expensive vehicle with lots of bells and whistles will cost more to insure than an older base model vehicle with lots of miles. And a sports car is considered a higher risk than a minivan, so it has a more expensive insurance policy.
The make of the vehicle also affects your car insurance premium. According to Quadrant Information Services, Dodge has the highest car insurance costs on average, and Mazda has the lowest.
Age can significantly affect car insurance premiums, especially for motorists under 25 or over 75.
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Inexperienced young drivers are statistically more likely to make mistakes or take unnecessary chances behind the wheel, and older drivers tend to have a higher risk of accidents after age 70.
Where you live and where you park your car overnight – known to your insurance company as your garage address – affects your car insurance rate. For example, motorists in big cities typically pay higher rates than drivers in rural areas. Here are some reasons why:
In addition to where you live in your state, the state itself affects your insurance rates. If you live in a state where hurricanes or heavy snow are common, you will likely pay more for car insurance. If you live in a state that is densely populated, you can usually pay higher car insurance premiums as well.
Auto insurance is regulated by states, so each has different minimum coverage requirements, if any. Drivers in states that require more than liability insurance or mandate higher policy limits usually pay more for coverage than people in other areas.
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Based on the average cost of full coverage auto insurance per state, the most expensive states are Michigan and Connecticut. The states with the cheapest car insurance on average are Maine and Ohio.
Having a clean driving record – meaning no tickets or accidents – is one of the most important things you can do to save money on your car insurance. Many car insurance companies offer some type of good driver or claims-free discount to encourage safe driving habits.
Of course accidents happen. But different types of accidents and moving violations are rated differently in terms of risk, so they affect your car insurance rates differently. The amount of time an accident or ticket stays on your record varies by state, but it’s generally three to five years. However, some violations, such as DUIs, could stay on your record longer.
A speeding violation for 1 to 5 mph over the speed limit results in an average increase of $409 annually for full coverage. If you have three accidents on your record, your rate will increase by an average of $3,620 annually.
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The gender listed on your driver’s license is another factor that affects your car insurance costs. Men tend to have higher premiums because they are more likely to take risks while driving and get into accidents.
However, the following states do not allow gender to be used as a factor in determining car insurance rates:
In every state except Massachusetts and Michigan, your marital status affects how much you pay for car insurance. Married drivers typically pay a little less than single drivers.
Part of it comes down to valuation, and the other part comes down to discount. Insurance companies see married drivers as safer, less likely to take risks and more financially stable because they pool their assets. Married drivers may also be more likely to qualify for bundled or multi-vehicle discounts than their single counterparts.
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In most states, your credit history may also be taken into account when providers determine your auto insurance premiums. Insurance companies view your credit history similar to your driving history. Drivers with lower credit scores seem to take more chances behind the wheel, and are considered high risk.
Maryland allows providers to use your credit score to set your rate on a new auto insurance policy but not to increase your rate if you renew, deny you a policy, cancel it or refuse to renew it.
Similarly, Oregon and Utah regulate how credit scores are used by insurance companies. These protections include prohibiting insurers from canceling your policy or refusing to renew your policy because of your credit after you’ve had a policy for at least 60 days.
Insurance companies are risky, and a long claims history will undoubtedly increase your premium. How much your rate will increase and for how long will vary by insurance company and state.
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Even a single insurance claim, or a claim you were found not at fault for, could result in an increase in your premium. However, some insurance companies offer accident forgiveness if it’s your first at-fault accident, so your rate won’t go up. Otherwise, claims usually stay on your record for three to five years.
Although many car insurance factors are beyond your control, one that you can directly influence is choosing a higher or lower deductible. In general, the higher the deductible, the lower the insurance rate. But that doesn’t mean it’s always a good idea to go for the highest deductible to pay the lowest premium.
If you decide to go with a higher deductible, one option is to put any money you save on your premium into a savings account to have on hand if you ever have to pay your deductible.
The types of insurance you get and the coverage limits you choose also affect how much you pay for car insurance. Every state except New Hampshire and Virginia requires some form of auto insurance. But beyond just meeting your legal obligation and the minimum requirements for your state, you have many options for additional auto insurance coverage.
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It is important to understand your needs and your finances when choosing types of insurance and their coverage limits. Determine whether minimum or full coverage is best, as well as whether you’ll benefit from other add-ons.
Nationally, the average car insurance rates for a married 35-year-old driver with a clean driving record and good credit are $1,730 per year for full coverage and $635 per year for minimum coverage. How much car insurance costs you will vary based on some or all of the 10 factors we’ve discussed here. Comparing your quotes from different suppliers can help you determine if you are getting a good deal.
When you’re shopping for auto insurance, you probably can’t do much about your marital status, credit score, claim history, or the rest right now. But that doesn’t mean you can’t do anything to try to lock in a better car insurance rate.
Because auto insurance companies are constantly competing for market share, they often adjust rates up and down to try to gain a competitive advantage. Shop around to see if other carriers have better rates. The most
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