Nerdwallet's Auto Insurance Calculator: Accurate And Reliable?

NerdWallet's car insurance calculator helps users estimate their car insurance costs. The amount spent on car insurance depends on the car, the user's age, the desired amount of coverage, driving record, and location. The calculator is part of a collection of tools that can help simplify insurance decisions.

How to use the NerdWallet auto insurance calculator

NerdWallet's car insurance calculator can help you estimate your car insurance costs. The amount you end up spending will depend on your car, your age, how much coverage you want, your driving record, and your location.

To use the NerdWallet auto insurance calculator, you will need to provide some basic information, including your address, date of birth, occupation, driver's license, and marital status. You will also need to provide details about your vehicle, such as the mileage, date of purchase, and vehicle identification number (VIN). If you haven't purchased the car yet, you can provide the make, model, and year.

The calculator will also ask about your driving history, including any claims, violations, and tickets you've had in the past five years. Additionally, you will need to provide the name of your current or previous insurer, if you have one.

Once you have entered all the required information, the NerdWallet auto insurance calculator will provide you with an estimate of your car insurance costs. It is important to note that the calculator is only an estimate, and the actual cost of your car insurance may vary.

Using the NerdWallet auto insurance calculator can be a helpful first step in understanding your potential car insurance costs and making informed decisions about your coverage needs.

How your age affects your auto insurance quote

Age is one of the most important factors that insurance companies consider when providing a car insurance quote. Young people, especially teens and first-time drivers, are deemed to be high-risk drivers due to their inexperience. As a result, they often pay the highest auto insurance premiums, with rates decreasing as drivers gain more experience.

For example, a 16-year-old driver with full coverage insurance pays around $613 per month, while a 25-year-old driver pays approximately half of that for the same coverage. Rates continue to decrease as drivers enter their mid-20s to late-50s, as these drivers have more practice and road maturity.

After age 60, rates begin to increase again as age-related factors like slower reflexes and diminished vision or hearing can impact driving ability. However, senior drivers are still likely to pay less than young drivers, assuming they have a clean driving record.

In addition to age, insurance companies consider other factors such as gender, marital status, location, driving record, and credit score when determining insurance rates. By comparing quotes from multiple companies and taking advantage of discounts, drivers can find ways to save on their auto insurance.

How your driving record affects your auto insurance quote

When you apply for auto insurance, insurance companies will check your driving record to assess how you drive and how responsible you are behind the wheel. They will also factor in other conditions, such as your employment status, whether you've taken extra driving courses, and where you keep your vehicle.

Your driving record is one of the key factors that affect how much you pay for car insurance. A good driving record generally results in lower premiums, while a history of accidents, traffic violations, or other infractions can lead to increased rates.

Insurance companies typically look back at the previous three to five years of your driving record when setting insurance rates. However, this can vary depending on state regulations and individual companies, with some checking as far back as seven to ten years.

Accidents, traffic violations, and driving-related convictions are among the factors that can negatively impact your driving record and, consequently, your insurance rates. Here are some examples of how your driving record can affect your auto insurance quote:

• Accidents: A history of accidents, especially those that are your fault, indicates a higher risk to insurance providers. If you have multiple accidents on your record, insurers may perceive you as more likely to file insurance claims, resulting in increased costs for them. As a result, they may adjust your premiums accordingly.
• Traffic Violations: Traffic violations such as speeding tickets, reckless driving, or running red lights are red flags for insurance companies. These infractions suggest a disregard for traffic laws and responsible driving behaviour. Insurance companies view these violations as indicators of increased risk and may raise your insurance rates. Multiple violations can have a cumulative effect, further amplifying the impact on your premiums.
• Driving Under the Influence (DUI) or Driving While Intoxicated (DWI): A DUI or DWI conviction is a serious matter that significantly impacts your auto insurance premiums. Such offences signal a high level of risk and demonstrate irresponsible behaviour behind the wheel. In some cases, insurance companies may refuse coverage altogether due to the elevated risk associated with these offences.
• Minor Violations: Even minor moving violations, such as driving 10 miles per hour over the speed limit, can increase your insurance premiums by 10 to 15 percent. These violations tend to stay on your record for approximately three years, so it's best to wait it out before applying for a new policy or switching insurers.

It's important to note that maintaining a clean driving record is crucial, as it can help keep your auto insurance rates low. Additionally, taking defensive driving courses or improving your credit score can also positively impact your insurance costs.

How your location affects your auto insurance quote

NerdWallet's car insurance calculator can help you estimate how much full coverage may cost in your area. The calculator takes into account factors such as your age, driving record, location, and the car you drive. Location is a significant factor in determining your auto insurance rate. Insurance companies use your address and ZIP code to set premiums because crime rates, population density, claims volume and frequency, and road conditions vary depending on your region and city.

Living in a densely populated urban area can lead to higher car insurance premiums. This is because accidents are more likely to occur in these areas due to the higher number of vehicles on the road. Packing a large number of people into a small area also increases the chances of traffic congestion and accidents. As a result, car insurance companies use this data to charge higher premiums in metropolitan areas.

The state you live in also plays a role in determining your auto insurance quote. Each state has its own laws and minimum requirements for coverage types. For example, some states require personal injury protection (PIP), which can increase or decrease premiums depending on whether the state has a no-fault insurance policy. States with more extensive claim requirements, such as Michigan, tend to have higher car insurance rates to cover the cost of unlimited protection for personal injuries.

In addition to state laws and population density, your ZIP code can also impact your auto insurance quote. If your ZIP code has a high frequency of auto insurance claims, insurers may designate your neighborhood as high risk and quote higher premiums. Natural disasters, such as floods and hurricanes in coastal states like Florida or Louisiana, can also increase insurance costs due to higher claims frequencies. Severe weather conditions, such as snow and hail, can lead to a higher chance of accidents and vehicle damage, resulting in higher premiums.

In summary, your location is a significant factor in determining your auto insurance quote. Insurance companies consider factors such as population density, crime rates, weather conditions, road conditions, and the frequency of claims in your area when calculating your premium. These factors vary depending on your state, city, and ZIP code, ultimately influencing the price you pay for car insurance.

How your credit score affects your auto insurance quote

NerdWallet's car insurance calculator can help you estimate how much full coverage may cost in your area. The calculator takes into account factors such as your age, driving record, location, and the car you drive. While your credit score may not be a direct input in the calculator, it can still impact your insurance quote.

In most states, car insurance companies use an applicant's credit score and credit history when calculating their premium. A higher credit score is associated with a lower risk of claims, and drivers with lower credit scores usually pay higher premiums than those with high credit scores. This is because studies have shown that people with lower credit scores tend to file more claims.

When checking your credit score, insurance companies will usually perform a "soft inquiry", which does not change your credit score. This is different from a "hard inquiry", which may lower your credit score and is often performed by lenders when making lending decisions.

In some states, including California, Hawaii, and Massachusetts, laws prevent insurers from using credit history to set insurance rates. However, in most states, insurance companies are allowed to use a credit-based insurance score to calculate premiums.

While your credit score may impact your insurance quote, it is not the only factor that insurance companies consider. Your driving history, the type of vehicle you drive, and other factors also play a significant role in determining your insurance rate.

Frequently asked questions