5+ years writing insurance and personal finance topics
Auto, home, health, and life insurance expertise
Elizabeth has extensive insurance industry experience, having written for Insureon, Rate Retriever, and Insurify. She’s also finance and insurance editor for Car and Driver.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
Mark FriedlanderDirector, Corporate Communications
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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U.S. drivers pay an overall average of $155 monthly for auto insurance, according to Insurify’s analysis of recent data. However, car insurance premiums vary among drivers based on several factors, like your ZIP code, age, and vehicle type.[1]
While some rating factors are out of your control, you still have ways to save money on your car insurance policy. Learn more about what factors affect your car insurance premium and how you can reduce your insurance costs.
Quick Facts
Every driver pays a different rate for car insurance based on their unique profile.
Factors like age, credit history, ZIP code, and driving record can affect car insurance costs.
You have many ways to save money on car insurance, including discounts, improving your credit, and raising your deductible.
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Car insurance rates have already risen 17% since 2022
Insurers experienced record-breaking losses in 2022 and are raising rates in an attempt to stay profitable. As a result, car insurance premiums have skyrocketed across the country. Rates have increased by 17% since 2022, according to Insurify's analysis. Currently, the national average for full coverage insurance is $207 per month; $103 for liability-only policies.
Several factors are behind the rising price of auto insurance. Inflation, supply chain issues, and labor shortages have significantly increased the cost of car repairs, meaning insurers are paying more for claims.
More damaging severe weather events due to climate change and escalating replacement costs for vehicles are also influencing rates. Damages from natural disasters totaled $165.1 billion in 2022, according to the NOAA National Centers for Environmental Information (NCEI).1 Comprehensive car insurance pays for weather-related damages, so insurers are covering more claims after natural disasters.
Unfortunately for drivers, the cost of car insurance will likely continue to rise for the foreseeable future. Insurify’s data science team predicts a total year-over-year increase of 22% by the end of 2023. While you can’t control the weather or inflation, insurers consider numerous other factors when determining rates — some of which you can change.
10 factors that can affect car insurance costs
Insurance companies base car insurance rates on individual drivers’ profiles. Insurance companies consider various factors when calculating your auto insurance premium. Here are some common rating factors that insurers use across the U.S.
Insurance company
If you’re wondering why your car insurance is so high, your insurance company might be to blame. Car insurance companies generally consider the same factors when setting rates, but each has its own way of weighing those factors. This means your rates can vary significantly from company to company, so it makes sense to use a quote-comparison platform to compare rates from multiple insurers in one place.
ZIP code
Your location greatly affects your car insurance costs. If you live in an area with severe weather, natural disasters, or a high rate of vehicle theft, you might pay more for your policy. Insurance companies also use your ZIP code as a rating factor. It’s possible that the cost of car insurance in your ZIP code might be higher or lower than the next ZIP code over, due primarily to car theft and vandalism rates.[1]
Age
Experienced drivers tend to pay lower car insurance premiums than young drivers since insurers analyze risk when determining prices. The fatal crash rate per mile for drivers between 16 and 19 is disproportionately high — about three times the rate for drivers 20 and older.3
Auto insurance premiums fall to their lowest price around age 65, with an average monthly rate of $145, which is about 62% lower than the $384 average rate for 18-year-old drivers. Crash rates are also lowest for drivers between 60 and 69, at 241 total crashes per 100 million miles driven, according to the AAA Foundation for Traffic Safety.4
Below are the average monthly quotes for full-coverage auto insurance for drivers by age.
Age
Average Monthly Quote
18
$384
20
$301
25
$197
30
$175
35
$169
50
$157
65
$145
80
$171
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Gender
Male drivers typically pay more for car insurance than female drivers due to big differences in driving patterns. Men are more likely than women to engage in risky driving, including driving while intoxicated, speeding, and not using seat belts. In 2021, 72% of all U.S. motor vehicle crash deaths were males, according to the Insurance Institute for Highway Safety (IIHS).5
Young adults see a larger gender disparity in insurance premiums, but the gap narrows after ages 16 to 29 due to changing behaviors. Female drivers ages 16 to 19 have a fatal crash rate of 3.3 per 100 million miles. Teen males have a 94% higher rate of 6.4. By ages 30 to 59, the male rate dips to 1.6 per 100 million miles, 45% higher than the female rate of 1.1, IIHS data shows.
Important Information
California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania prohibit car insurers from using gender as a rating factor.
Vehicle make and model
Your car’s make and model can significantly influence your auto insurance rate. Several different factors go into determining the likelihood and potential cost of claims, including your car’s safety features, anti-theft devices, cost of replacement parts, and MSRP.
Practical family vehicles, like the Subaru Forester, Honda CR-V, and Hyundai Tucson, tend to be the cheapest cars to insure. Luxury vehicles, like the Tesla Model 3, and sports cars, like the Chevrolet Camaro, come with higher premiums due to costly repairs, specialty parts, and a greater frequency of accidents.
Driving record
Your driving record is one of the most critical factors in determining your car insurance rates. If you have a clean driving record, you’ll likely pay significantly less than drivers with traffic violations or car accidents on their records. Insurance companies tend to charge more if your driving habits indicate you could be a high-risk driver.
Drivers with a DUI on record pay the highest insurance rates on average. COUNTRY Financial, the cheapest insurer for drivers with a DUI, charges $34 per month for liability coverage. By comparison, the company charges drivers with a clean record just $22 per month for liability insurance.
Drivers with at-fault accidents on record experience rate increases of about 26%. Depending on your insurance company, you could face a premium surcharge every year when your policy renews, for three to five years.
Some insurers offer accident forgiveness coverage for your first car accident. Speeding tickets can also increase your premium, but how much of a spike you’ll see depends on your overall record, location, and insurance company. The following table shows the average monthly liability-only rates charged by top insurers compared to their rates for drivers with clean records.
The below rates are estimated rates current as of: Thursday, November 30 at 11:00 AM PST.
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
If you choose a liability-only policy to fulfill your state’s minimum requirements for insurance coverage, you’ll have a lower monthly premium than you would with full-coverage insurance. Liability insurance helps pay for the other driver’s expenses, including car repairs and medical bills, if you’re at fault for an accident.
However, a liability-only policy won’t cover damage to your own vehicle or pay claims if the other driver is at fault but doesn’t have insurance. Collision insurancecovers your damages after an accident, regardless of fault.
Liability policies also don’t pay for repairs from falling branches, hail, or other weather-related damage. For that, you would need comprehensive coverage. Full-coverage policies typically include comprehensive and collision coverage, and liability insurance that exceeds state minimums.
Keep in Mind
Insurance professionals recommend buying more than just your state’s minimum required amount of liability insurance. State limits may be too low to provide you with adequate financial protection in case of an at-fault accident.
Deductible amount
If you’re facing high monthly payments, increasing your collision and comprehensive deductible could help you lower your car insurance bill. High-deductible car insurance is cheaper than low-deductible coverage and could be a smart option if you’re a good driver who gets into fewer accidents than most. However, with a high deductible, you’re responsible for more out-of-pocket expenses if you file a claim.
For example, if you get into an accident with a $500 collision deductible, you would pay the first $500 to repair your car, and your insurance company would cover the remaining costs. With a $1,000 deductible, you’re responsible for paying $1,000 before your insurer steps in, but your monthly premium will likely be significantly lower.
Credit history
Good to Know
Insurers typically consider credit history when determining rates, but opponents of credit-based scoring say the process disproportionately affects drivers with low incomes and people of color.
California, Hawaii, Massachusetts and Michigan restrict the use of credit information in auto insurance pricing. Additionally, Alabama, Delaware, Florida, Illinois, New Mexico, Oklahoma, Texas, Vermont, and Washington prohibit using a lack of credit history as a factor in setting rates, according to the National Conference of State Legislatures.
Insurance companies often use credit history to generate a credit-based score that they use as a factor in determining rates. However, a few states ban the practice, and some insurers offer quotes without your credit history. Drivers with poor credit scores generally pay more than drivers with excellent credit.
The average monthly premium for drivers with poor credit is $255 for full-coverage auto insurance, which is significantly more than the $170 rate for drivers with excellent credit. If you’re seeing a poor score reflected on your premiums, you can improve your credit by catching up on overdue bills, paying on time in the future, and maintaining a mix of account types.
Rates by Credit Tier
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Mileage
The number of miles you drive can affect the price of car insurance premiums since insurers are calculating your odds of making a claim. Even if you’re a cautious driver, logging more miles means you have a higher chance of an accident.
If you gave up your daily commute for a work-from-home position or live in a walkable area, you’ll likely have a lower rate than someone who drives frequently for work or weekend getaways. Depending on how few miles you drive, a pay-per-mile policy could help you save. Some insurers, like Mile Auto and Metromile, specialize in affordable pay-per-mile insurance.
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Take advantage of discounts to lower your car insurance premium
Most car insurance companies offer discounts, which help people save money on their premiums. Every car insurance company offers different discounts with varying savings potential. Here are some of the most common car insurance discounts you can find from many national and regional insurers:
Good student
High school and college students who get good grades or maintain a minimum GPA can often qualify for a lower car insurance rate.
Student away at school
Young drivers who live on campus may be able to qualify for a student-away-at-school discount. Generally, the college (or high school) must be a certain number of miles distant from the student's home – often 100 miles or more. Requirements for the discount can vary from insurer to insurer, so it's a good idea to contact your insurance company to determine if your student qualifies.
Safe driver discount
Many insurers provide a discount to safe drivers who've had a clean motor vehicle record for three to five years. You might be able to get cheaper car insurance if you have no recent claims, no violations on your record, or if you complete an approved defensive driver course.
Multi-car discount
If you insure multiple vehicles on the same car insurance policy, you can often get a lower premium. An insurance agent can tell you how much you’ll save for insuring more than one car.
Vehicle equipment discount
With a vehicle equipment discount, you can potentially get a lower rate if your vehicle has airbags, anti-lock brakes, an anti-theft device, or other advanced safety features.
Payment discount
If your insurance company offers payment discounts, you can usually get a cheaper premium for paying your annual premium in full, enrolling in automatic payments, or signing up for paperless policy statements.
Taking advantage of car insurance discounts is a great way to save money on your policy. But you can also reduce your insurance costs in several other ways.
Bundle insurance policies
It’s common for insurance companies to offer savings when you bundle your policies. For example, if you purchase a car insurance policy and a home insurance policy from the same insurer, you can often get discount of 20% or more. Some companies offer a discount when you combine any property insurance policy, like renters or condo insurance, with an auto insurance policy.
Increase your deductible
If you want to get a lower car insurance premium, consider raising your deductible. Choosing higher deductibles for coverages like collision or comprehensive insurance will lower your monthly premium. Before raising your deductible, however, be aware that it will increase your out-of-pocket costs in a covered claim.
Improve your credit score
Boosting your credit score can often help you save money on your car insurance policy. When you increase your credit score your credit-based insurance score can also improve, indicating to insurance companies that you’re less likely to file claims. Make on-time payments, pay down debt, and lower your credit utilization ratio to increase your credit score.[2]
Helpful Tip
Paying all your bills on time and in full every month is the single best thing you can do to improve your credit.
Pay your premiums in full
If you can afford to pay your annual car insurance premium up front and in full, it could help you save money on your policy. Some insurance companies offer a discount if you pay up front instead of in monthly installments.
Shop around and compare rates from multiple insurers
Because car insurance companies charge different rates for coverage, it’s a good idea to shop around and compare quotes from several insurers. You can get personalized quotes from individual insurers or use a quote-comparison platform to get matched with multiple quotes using a single application.
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Car insurance cost FAQs
Still have questions about how auto insurance rates are calculated and how to save money? Check out answers to these frequently asked questions for more information.
Why do car insurance companies increase rates?
Car insurance companies increase rates for a few reasons. Your premium might go up if you get into an auto accident, file a claim, increase your coverage limits, or lower your deductible. Negative changes to your credit score can also lead to higher rates.
If you get into an accident, will your insurance rates go up?
In most cases, your insurance rate will increase if you get into an accident, especially if you were responsible. The rate increase will depend on several factors, like the severity of the crash. If your insurance provider offers an accident forgiveness endorsement, you may be able to avoid rate hikes after your first at-fault collision.[3]
Why do young drivers pay so much for car insurance?
The main reason why younger drivers pay high rates for car insurance is that they are newly licensed and have a high accident rate. Data shows that drivers between 16 and 19 years old have a higher risk of accidents than any other age group.[4] Because of that risk, insurance companies charge higher rates for young drivers.
Why do males pay more for car insurance than females?
Males tend to pay higher car insurance rates than females because generally, insurers consider males to be higher-risk drivers. Males are more likely to drive under the influence than females.[5] However, some females might pay higher rates than males depending on personal factors like their driving record, credit history, and age.
Which car insurance companies offer the cheapest rates?
COUNTRY Financial offers the cheapest car insurance rates, starting as low as $22 per month for liability-only coverage, and $46 for full coverage. NJM and Hugo also offer cheap car insurance, with liability averages of $37 and $39, respectively.
However, it's possible that none of these insurers offer the cheapest policy for you. Some auto insurance companies weigh certain factors, like age or accident history, differently than others do. Comparing car insurance quotes from multiple insurers is the best way to find a better deal.
Is it normal for car insurance to increase every year?
No one wants to see a premium hike on an insurance renewal letter, but it’s normal for your car insurance rates to increase every year. "Even if you didn’t get into any accidents or have traffic violations in the previous year, insurance companies raise rates based on their loss costs for accidents, higher costs of replacement parts and labor, and other factors such as more litigated accident claims, increasing vehicle theft, and rising medical care costs to treat accident victims," according to Mark Friedlander at the Insurance Information Institute.
Insurance Institute for Highway Safety. "Males and females." Accessed February 27, 2023
Elizabeth Rivelli
Elizabeth Rivelli is a freelance writer covering insurance and personal finance. She has extensive knowledge of various insurance lines, including property and casualty, health, and life insurance. Her byline has been featured in dozens of publications, including Investopedia, Forbes, Bankrate, NextAdvisor, and Insurance.com.
3+ years producing insurance and personal finance content
Main architect of the Insurify Quality Score
Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.
Mark FriedlanderDirector, Corporate Communications
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
