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Car insurance premiums can vary drastically based on numerous factors, including your driver profile and location. Insurify’s car insurance calculator uses common rating factors, such as your age, where you live, your credit score, and your insurance history, to help you estimate how much you might pay for car insurance.
Understanding how car insurance rating works may help you find the best, most affordable policy for your needs.
Various factors affect how much you pay for car insurance. Some — like your driving habits — are in your control, while others aren’t. Factors that influence car insurance premiums include:
Location: Where you live affects your car insurance costs in multiple ways. Most states require drivers to have a minimum amount of insurance, but how much and what types differ among states — and even among ZIP codes. Crime and accident rates in your area also affect your premiums, as does where you park your car. People who live in an urban area with high theft rates and park their cars on a city street overnight will likely pay more for car insurance than someone who lives in a low-crime suburb and keeps their car in their garage.
Age: Generally, teenagers pay higher car insurance premiums than any other age group. They typically have less driving experience than older drivers and are statistically more likely to get into serious accidents. Car insurance rates begin to decrease after age 25, as drivers gain more experience and their accident risk declines.
Coverage level: Liability-only coverage is generally the cheapest car insurance you can buy. As you add coverages like collision, comprehensive, and personal injury protection, your car insurance premium will increase. You’ll also pay more for higher coverage limits.
Deductible: The deductible is the amount you must pay out of pocket before your insurance begins to pay for a claim from a covered event. Generally, the higher your deductible, the lower your insurance premium will be. Conversely, if you choose a lower deductible, your premium will be higher.
Credit score: Many states allow car insurers to consider your credit when setting car insurance rates. Generally, credit scores can predict how many claims a person may file and how much those claims may cost an insurer, according to research by the Federal Trade Commission. People with higher credit scores tend to pay less for car insurance than people with lower credit scores.
Driving history: Your driving history — including speeding tickets, accidents, and moving violations — can indicate how you’re likely to drive in the future. If you have a clean driving record, you’ll likely pay less for insurance than someone who has moving violations.
Vehicle: Your car’s make, model, and year also influence your premium. A more expensive vehicle is costlier to repair or replace, meaning your insurer takes on more financial risk. If you drive a model that has a history of mechanical issues or a poor safety record, your insurance rates may be higher. But if your car has safety features like driver assist or theft-deterrent devices, you may be able to get a car insurance discount.
Gender: Car insurance premiums are typically higher for men than women. Male drivers of any age are more likely to take risks while driving, such as speeding or not wearing a seat belt, according to the Insurance Institute for Highway Safety.
Marital status: Car insurance premiums tend to be lower for married couples than for single people. Spouses may qualify for discounts that could be more difficult for single drivers to get, such as bundling, homeowner, or multi-car discounts.
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How do car insurance companies calculate premiums?
Insurance protects you from the financial risks of an accident or other damage to your car. When you buy a policy, the insurance company essentially assumes the financial risks on your behalf. This makes it critical for insurers to be able to predict how likely you are to file a claim that will cost them money.
Insurers use factors like those discussed above and their own proprietary scoring models to create a risk assessment of how likely a driver is to file a claim. Each insurer has its own formula for assessing driver risk, but they all use the same basic factors. These differences in scoring models are why it’s possible for you to get very different car insurance quotes from different companies.
Overall, however, if your insurer’s assessment indicates you’re less likely to file a claim, the company will probably offer you a lower insurance rate. But if the insurer decides you’re more likely to file a claim, you’ll probably receive a higher insurance quote.
How much car insurance do you need?
To determine how much car insurance you need, you should first consider your state’s minimum insurance requirements. Every state except New Hampshire requires drivers to carry at least a minimum amount of liability insurance. Some states also require other types of insurance, like personal injury protection (PIP) or uninsured/underinsured motorist protection.
If you lease or finance your car, the leasing company or lender may require you to carry full-coverage insurance, which includes collision and comprehensive coverage. Even if you own your car free and clear, it may make sense to carry full-coverage insurance or higher liability limits. For example, if you drive a luxury model that would be very expensive to repair or replace, you might want to buy full-coverage car insurance.
Keep in Mind
Adding coverage increases your financial protection but will also result in a higher monthly premium.
The vehicle you drive and your personal financial situation will also influence how much insurance you should have. Depending on your situation, you may need some or all of the following types of coverage:
If you cause property damage or personal injury to someone else while driving, liability insurance pays to repair the damage and cover medical costs for the injured party. For example, if your policy’s liability limits are 100/300/100, it means your insurer will pay $100,000 per person and $300,000 per accident for bodily injury and $100,000 for property damage.
Collision and comprehensive
When added to liability coverage, collision and comprehensive make up full-coverage car insurance. Collision pays to repair your vehicle if you’re involved in an accident you caused. Comprehensive pays if something other than an accident damages your car — like a tree limb falling on the hood. Your car’s value and your deductible amount typically affect coverage limits for comprehensive and collision. These coverages are usually optional, but if you lease or finance your car, you’ll likely have to carry comprehensive and collision coverage.
Guaranteed asset protection (gap) insurance is an optional coverage, but it can be a financial lifesaver if you finance or lease your car. If an accident totals your car or someone steals it, your full-coverage car insurance will pay the lender or leasing company. But if the claim settlement amount is less than what you owe on the car, you’d be responsible for paying the difference. Gap insurance pays that difference on your behalf.
Uninsured/underinsured motorist coverage
Despite most states requiring car insurance, about one in eight drivers on the road in the U.S. doesn’t have insurance, according to the Insurance Research Council. If one of those uninsured drivers causes an accident that damages your car or injures you or a passenger in your car, uninsured motorist coverage can help pay for repairs and medical bills. An underinsured driver is one who has liability limits too low to cover your damage or injury costs — underinsured driver coverage applies in this type of accident. While both coverages are optional in most states, many insurers include them in full-coverage policies.
Medical payments insurance (MedPay) is an optional coverage that can help pay medical bills for you and your passengers if you’re injured in a car accident. MedPay is secondary to your health insurance, which will pay your bills first. But unlike health insurance, it doesn’t have copays or deductibles.
Personal injury protection
If you live in a no-fault state, you’ll likely have to carry personal injury protection (PIP) coverage. In addition to paying for medical bills stemming from an accident, PIP can also pay for other related costs, such as lost wages and hiring someone to do essential household work that you can’t perform because of injury.
An optional coverage, rental reimbursement can help cover the cost of a rental car until you can repair or replace your vehicle following a covered accident. Be sure you understand the reimbursement limits for this coverage and how it works before renting a car after an accident.
How can you lower your car insurance premiums?
While some factors that affect your car insurance premiums are beyond your control, you can still take steps to cut costs. Even if you feel your premiums are currently fair, it makes sense to save money whenever possible. Here are some tactics to help reduce your car insurance costs.
How well you drive is one rating factor you can control. Avoid speeding, hard braking, hard starts, erratic lane changes, tailgating, and other risky behaviors that increase your chances of a crash. Many insurers provide discounts to good drivers, and you may be able to save even more by enrolling in a telematics program that monitors and rewards your good driving habits.
Score with discounts
Most insurers offer multiple discounts, and it’s possible to qualify for more than one. For example, you might get discounts for being a good student and for having certain safety equipment in your car. Or you may get a discount for having more than one vehicle on your policy.
Bundle to save
Some insurance companies offer lower rates to drivers who have multiple policies with the same company. If you have both your auto and home or renters insurance with one company — called bundling— you may be able to pay less for both policies.
Raise your deductible
Choosing a higher deductible reduces the amount an insurer will have to pay out in case of a covered claim. Insurance companies reward drivers who shoulder a larger share of financial liability by offering lower car insurance premiums.
It makes sense to compare prices any time you make a big-ticket purchase, including car insurance. Comparing quotes from multiple companies can help ensure you find the best policy for your needs at a price that fits your budget.
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Car insurance calculation FAQs
It’s impossible to predict with 100% accuracy what you’ll pay for car insurance until you actually get quotes from one or more insurance companies. But a car insurance calculator and some knowledge can help you get a useful estimate of what your costs will be. Here’s some more information that may be helpful when calculating car insurance costs.
Is $100 a month a lot for car insurance?
The national average cost of liability-only car insurance is $170 per month, according to Insurify data, so a liability quote of $100 per month is less than average. However, the average cost of full coverage is $253 per month. A quote of $100 per month for full coverage would be very cheap.
What does insurance coverage of $15,000, $30,000, and $5,000 refer to?
Coverages of 15/30/5 refer to car insurance liability limits of:
$15,000 per person for bodily injury liability
$30,000 per accident for bodily injury liability
$5,000 per accident for property damage liability
These limits apply to how much your insurance would pay to cover claims from the other party in an accident you caused. Liability insurance doesn’t pay for damage to your car or injuries to you or your passengers.
Is Progressive insurance really cheaper?
Progressive’s average quote for full-coverage auto insurance is $238 per month — slightly less than the national average of $253 per month. However, Progressive’s average is 29% higher than GEICO’s monthly average of $178 for full coverage. Progressive’s rate fares better when compared to Infinity’s average, which is $411 per month.
Keep in mind that many factors affect car insurance rates, and the actual rate you receive can vary from the national average or a company’s average.
How quickly can you calculate your car insurance premium?
Using an online tool like Insurify’s car insurance calculator allows you to estimate your car insurance premium in seconds. While no calculator can predict your premiums with 100% accuracy, Insurify’s calculator uses key insurance-rating factors and data from millions of quotes to provide an informed estimate of your likely costs.
Evelyn PimplaskarEditor-in-Chief, Director of Content
Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.
Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.
Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.
Evelyn is passionate about creating personal finance content that distills complex topics into relatable, easy-to-understand stories. She believes great content helps empower readers with the information they need to make important personal finance decisions.