Average Cost of Auto Insurance in 2021

Average Cost of Auto Insurance in 2021

When you buy a vehicle or rent it, it is necessary to get auto insurance to protect yourself from liability for injuries and damage, in case you get in an accident. In the United States, the cost of auto insurance is around $125 per month. Of course, there may be people who are paying much more or much less, which only goes to show the wide range of auto insurance products available in the market. Many variables decide the cost of your car insurance. Some factors like where you live and what vehicle you drive are difficult to change while others like your driving habits and the level of coverage you purchase are up to your decision. The best way to cut the cost of auto insurance is to shop around. You can start your search online and then talk to the insurance advisors of different companies to get the best possible costs for your auto insurance.

Let us look at the factors affecting the average cost of auto insurance.

Basic Demographics

Your gender, age location and marital status have a significant impact on the cost of your auto insurance. That is because the insurance companies have a lot of data which tells them whether you are a low-risk customer or high risk one, based on the demographics. For instance, young unmarried males are more likely to get in an accident compared to older married females who are less likely to get in an accident; this is the reason that the male in question will have to pay more. At the same time, according to statistics, married people have fewer car accidents which are why they manage to pay less premium. The location also matters a lot because state laws impact insurance costs. At the same time, if you live in a densely populated area, then you are at a higher risk for accidents. Areas which are more vulnerable to natural disasters also cause you to pay a higher premium which is why Louisiana is the second most expensive state for car insurance.

The State You Live In 

As mentioned above the state, you live in can have a significant impact on your auto insurance premiums. The five states with the cheapest annual car insurance premium rates are – Maine, Wisconsin, Idaho, Iowa, Virginia. The five states with the highest premiums are Michigan, Louisiana, Florida, Oklahoma, and District of Columbia.

The Type of Car You Drive

The thumb rule to keep in mind is that the faster a car is the more high risk the insurance company will consider you to be. The best way to keep car insurance rates low is to opt for a family car, like a minivan, SUV or sedan. On the other hand, if you drive a pricey high-performance sports car, you will pay much more in premiums. Larger cars are also considered as safer cars because they absorb the impact well in an accident. Then again used vehicles are cheaper to insure compared to new ones. It would help if you also considered additional factors like anti-theft devices, anti-lock brakes, and other equipment which focuses on the safety of the vehicle.

Your Driving History

This, of course, is the most critical and self-obvious factor that impacts your car insurance. The more tickets and traffic violations you have on your record, the higher the premiums you will pay. Some tickets are worse compared to others; for instance, you have driven under the influence or reckless driving the insurance premium will be double. Of course, you cannot change the past, but make it a point to be a safer driver henceforth. Some auto insurance companies also provide a tracker which records data on things such as mileage, sudden deceleration or acceleration, rough turns, too much speed, and whether you drive a lot at night. The reward of good driving can be lower insurance premiums. Most companies also provide a discount on the premiums if you take a defensive driving course. 

Your Credit Score

According to the research data collected by insurance companies, people with higher credit scores also are less likely to file a claim. However, according to the laws of the states of California, Massachusetts and Hawaii, using credit score to assess risk is illegal. In most of the other states, it is considered while deciding your insurance premiums. It would help if you took some measures to improve your credit score and for this, it is a good idea to consult a good credit score consultant companies. Simple things like paying your bills on time for a reasonable length of time are the easiest way to improve your credit, and there are other methods too.

As discussed above, your driving habits, and the amount of coverage you choose also have an impact on the cost of your auto insurance. Hence do your homework well and opt for the best available auto insurance policy in the market. 

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