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How Much Is Car Insurance: Factors, Costs, and How to Calculate It

How Much Is Car Insurance

Car Insurance

How Much Is Car Insurance: Factors, Costs, and How to Calculate It

Besides the benefits, reasons for purchasing, and all the dilemmas circulating around the topic of car insurance, what people sometimes really want to hear is an answer to the question, ‘how much is car insurance’. It’s a very buzzworthy aspect of the automobile insurance for the simple fact that the price can be a tipping point for someone and something that will push them to either buy one or don’t.

In the past, it was much harder to pinpoint all the costs and to see how much cash will drip away from your budget. Luckily, those times are gone. Today we’ll help you with all the car insurance calculations you need. Get a pen and paper, and it’s time to do some mathematics, folks!

How Much Is Car Insurance – Average Rates

According to the National Association of Insurance Commissioners, in the United States, the average amount which you give in order to ensure your car is around 800 USD. This sum has been changing in the last years. For instance, in the years 2013, 2014, and 2015, the rate has been slowly increasing and in 2015 it reached $889.

However, that doesn’t really mean much. Why you may ask. It’s because there are all sorts of different factors that determine the amount of money you’ll spend on insuring your vehicle. Just to give you a quick example – a male under 25 years may pay around $1,000, whereas a man who is married and approaching the fifties and has a good driving record can pay something in the range of $600 to $700.

how much is car insurance

Average Rates for car insurance

So, the insurance gap between certain categories of people is widening and that is causing some fears among people as to the future prices of automobile insurance.

How Much Is Car Insurance – Factors That Determine the Price

As we said earlier, there’s no universal cost for insurance, but it all boils down to the different factors you have or your vehicle has. Let’s take a look at some of the ones that are important for determining the price.

Driver’s Information

By this, we mean all the data that the car insurance company has on you – whether it’s your gender, age, marital status, where you live, and similar information. Even your credit score is evaluated!

You’d be surprised to find out how big a role your location plays in all this as well. It’s considered that in areas which are densely populated, you pay more. That’s because the risk of getting into an accident or suffering an injury is extremely high.

According to some statistics, states like Idaho, South Dakota, North Carolina, and others have a lower average spent on car insurance. On the other hand, New Jersey, New York, Washington D.C., Florida, and other states rank higher.

Individuals, usually, ask how to save when it comes to this factor. The truth is that that’s very, very hard because you can’t just change your location and move into another state just because of your car insurance. The same goes for marrying – people certainly wouldn’t find a husband/wife only to pay less.

Driving Experience and History

This one pretty much stands out from the crowd as to why companies consider it when calculating your rate. It’s very simple – if you have a bad driving history, speeding tickets, and other violations, the more you’ll pay. Some sources even claim that violations like driving under the influence or irresponsible driving can double the premium.

Driving Habits

Connected to the previous factor, the driving habits can be meaningful to insurers, too. How often you drive your car, whether you use the public transport, whether you drive only during the weekends, where you park your car – in the street, in a garage, or somewhere else… All of this is calculated into how much your premium would cost.

How to save? Well, the obvious answers would be carpooling, going to work by bus or on foot, driving less, and so on.

Your Vehicle

Car insurance was probably lying in the back of your mind when you were purchasing your car. And you won’t trade it or buy another one just to evade the high rates. Besides the demographics and all the info regarding the driver, the car is super important, too.

Some of the factors connected to your automobile include the type of car, the company that manufactured it, security, model of the car, where you keep it, and similar.

Type of Car Insurance

The advice to save on this one is not to go blindly to the insurance company and get the first type that you see. Instead, you should assess the current situation you’re in.

To illustrate this, the protection against personal injury isn’t a mandatory thing in all states. So, if you’re living in a state where it’s optional, you may decide not to purchase it. What’s more, the collision coverage or the comprehensive ones may not be the best solution for you if you seldom drive your car or if your vehicle isn’t worth much.

How Much Is Car Insurance – Saving Money on Your Car Insurance

Did you know that you can actually save some money on your car insurance? Yes, there are a few ways that you should follow if you want to accomplish this. They involve:

  • Driving carefully – You should strive to have the best driving record as possible. This is because the better driver you are the lower your rate will be. To achieve this you can try online courses that cost no more than $30 or spend around half a day in a classroom. In any case, after successful completion, you have a chance to remove any violation points you may have in your license and improve your overall driving record.
  • Buying online – When you sign up online, many insurers will provide you a discount on the insurance rate.
  • Keeping your car in a garage – If it’s inside, the vehicle is protected from most dangers, which makes it clear why the rate is lower this way.
  • Considering the type of automobile – Of course, the automobiles, which are luxurious, high-performing or imported from Europe have higher insurance rates. So, if you want to reduce your insurance costs, you should go for the more regular brands.

Final Words

Did this help you understand the way insurance rates are calculated and which factors play a vital role? What’s your experience with this? Share your story with us!

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Hi! I'm Rashed Ahammed, a freelance blogger and News Reporter for eFour Wheel. I write unique and research-driven content about business, career, insurance, and more.

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  1. Pingback: Car Insurance Calculator – What It Is and What It Depends On

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