Understanding The True Cost Of Full Auto Insurance Coverage

The cost of full coverage auto insurance varies depending on a range of factors, including age, location, credit score, driving history, and vehicle type. The national average cost of full coverage auto insurance is $223 per month or $2,681 per year. However, rates can vary significantly from state to state and between different insurance providers. For example, the average cost of full coverage auto insurance in Louisiana is $3,646 per year, while in Maine, it is only $1,505 per year. It is important to shop around and compare quotes from multiple insurers to find the best rate for your specific needs.

How much is full coverage car insurance per month?

The cost of full-coverage car insurance varies depending on a number of factors, including the insurance company, the driver's age, driving history, location, and the type of car.

Cost by Insurance Company

According to Bankrate, the average annual cost of full-coverage car insurance in the US is $2,329, which equates to $194 per month. However, the cheapest insurance companies for full coverage are Auto-Owners, Erie, and Geico, with average annual costs of $1,628, $1,548, and $1,716, respectively.

Cost by Driver's Age

The cost of car insurance is typically highest for young and senior drivers, due to their increased risk of accidents. According to Forbes Advisor, 18-year-old drivers pay an average of $8,765 per year for full coverage, while 30-year-olds pay 64% less, at $3,152 per year. Seniors over 70 also experience higher rates, with 70-year-olds paying an average of $3,005 per year.

Cost by Driving History

A driver's history can significantly impact the cost of car insurance. According to Forbes Advisor, drivers with a clean record pay an average of $2,150 per year for full coverage. However, those with a speeding ticket, a DUI, or an at-fault accident on their record will pay an average of $2,633, $3,537, and $3,005, respectively—increases of nearly $500, $1,400, and over $850.

Cost by Location

The cost of car insurance also varies by state. According to Forbes Advisor, Idaho has the cheapest full-coverage insurance, at $1,021 per year, while New York is the most expensive, at $4,769 per year. On the other hand, Bankrate reports that Michigan has the most expensive full-coverage insurance, at $3,643 per month, while South Dakota has the cheapest, at $248 per year.

Cost by Car Type

The type of car also influences insurance costs. According to ValuePenguin, the Honda CR-V is one of the cheapest cars to insure, with an average monthly cost of $133 for full coverage. In contrast, electric vehicles (EVs) tend to be more expensive to insure, with monthly costs up to 31% higher than those of standard cars.

Summary

To summarize, the cost of full-coverage car insurance varies depending on a number of factors. While the national average may be around $194 per month, this can be influenced by the insurance company, the driver's age and history, their location, and the type of car they drive.

How much is minimum car insurance compared to full coverage car insurance?

The cost of car insurance varies depending on several factors, including the type of coverage you choose. Minimum coverage car insurance is a policy that includes only the state-mandated amount of liability insurance, while full coverage car insurance includes additional coverage types such as comprehensive and collision insurance.

The national average cost of full coverage car insurance is around $1,718 to $2,681 per year, or about $143 to $223 per month. In contrast, the national average cost of minimum coverage car insurance is around $467 to $633 per year, or about $39 to $53 per month. So, full coverage car insurance is generally more expensive than minimum coverage car insurance.

However, it's important to note that the cost of car insurance can vary significantly depending on factors such as your age, driving record, credit history, location, and the insurance company you choose. Additionally, the specific coverage limits and deductibles you select will also impact your premium.

Full coverage car insurance provides more comprehensive financial protection in the event of an accident or damage to your vehicle. It typically includes liability coverage, which pays for the injuries and property damage you cause to others, as well as comprehensive and collision coverage, which pays for repairs or replacement of your own vehicle. Minimum coverage car insurance, on the other hand, only includes the state-mandated amount of liability insurance and does not cover damage to your own vehicle.

When deciding between minimum and full coverage car insurance, it's important to consider your financial situation and comfort level with risk. If you can afford the higher premiums and want the added protection, full coverage car insurance may be the best option. If you're looking to save money and are comfortable with the risk of paying for repairs or replacement of your vehicle out of pocket, minimum coverage car insurance may be sufficient.

How does age impact car insurance costs?

Age is one of the most significant factors that determines the cost of car insurance. In general, young drivers can expect to pay higher insurance premiums than older drivers, with rates starting to increase again around the age of 70. This is because accident trends and data show that younger and older drivers are statistically more likely to be involved in accidents. However, it's important to note that rates vary depending on individual rating factors, such as driving history and location.

Car Insurance for Young Drivers

Young or inexperienced drivers tend to pay the highest premiums for car insurance due to their lack of driving experience. Teen drivers are considered the riskiest to insure, as they are three to four times more likely to be involved in car accidents than older drivers. As a result, insurance companies often charge higher rates to offset the higher costs associated with teen driving claims. The good news is that premiums generally decrease as young drivers gain more experience behind the wheel, with a significant reduction usually occurring around the age of 25.

Car Insurance for Older Drivers

Seniors may also experience higher insurance rates due to factors related to aging, such as vision or hearing loss and slower reaction times, which can increase the likelihood of accidents. However, while insurance rates may increase for older drivers, they typically won't reach the high rates of teen drivers, assuming the senior driver has a clean driving record.

Gender and Car Insurance Rates

In most states, gender is also a factor in determining car insurance premiums. Men are generally considered more risky to insure than women due to a greater propensity for risky driving behaviours. As a result, men often pay higher rates than women. However, the difference in premiums between genders narrows as drivers age. Additionally, some states, such as California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania, prohibit the use of gender as a rating factor, resulting in equal rates for men and women with similar rating profiles.

Ways to Save on Car Insurance

Regardless of age or gender, there are several ways to save on car insurance:

• Shop around and compare quotes from multiple insurance companies.
• Take advantage of discounts, such as good student discounts, driver training discounts, and safe driving discounts.
• Maintain a clean driving record.
• Improve your credit score.
• Bundle insurance policies, such as home and auto insurance.
• Pay your premium in full upfront to take advantage of pay-in-full discounts.
• Reduce your coverage as your vehicle ages, especially if the cost of insurance exceeds the value of the car.

In conclusion, while age and gender do impact car insurance costs, there are various factors and strategies that can help mitigate these effects and lower your insurance premiums.

How much is auto insurance for young drivers?

Auto insurance for young drivers can be expensive, with rates depending on factors such as age, gender, location, and whether the driver is added to a parent's or guardian's policy.

Average Costs for Young Drivers

According to ValuePenguin, the average cost of full-coverage car insurance for 18-year-olds is $485 per month, while minimum coverage costs an average of $202 per month. For 16-year-olds, the average cost of full coverage is $3,192 per year, and for minimum coverage, it is $2,706 per year. WalletHub reports that the average cost of car insurance for teenagers is $215 per month for an individual policy, with younger teens paying more than older teens.

Costs by State

Car insurance rates for young drivers also vary by state. For example, Hawaii is the cheapest state for an 18-year-old to get car insurance, with an average rate of $145 per month for full coverage. In contrast, Rhode Island is the most expensive state, with an average rate of $887 per month.

Costs by Company

The cheapest car insurance companies for young drivers also depend on the state and individual circumstances. However, some of the companies that offer affordable rates for young drivers include:

• Erie
• State Farm
• USAA
• Geico
• Auto-Owners
• Progressive
• Nationwide

Ways to Save on Car Insurance for Young Drivers

• Stay on a parent's policy: Adding a teen to an existing policy is typically cheaper than the young driver buying their own coverage.
• Compare quotes from multiple companies: Shopping around for quotes can help find the most affordable option.
• Look for discounts: Many insurance companies offer discounts for young drivers, such as good student discounts, driver training discounts, and away-at-school discounts.
• Choose a higher deductible: A higher deductible can result in a lower premium, but keep in mind that you will pay more out of pocket if you file a claim.
• Choose the right car: Sports cars and luxury vehicles are more expensive to insure, so selecting a car with insurance rates in mind can help reduce costs.
• Review your coverage: Young drivers may not need comprehensive coverage and can opt for minimum coverage to save on premiums.

While auto insurance for young drivers can be costly, there are ways to mitigate the expense. By comparing rates, taking advantage of discounts, and considering the type of coverage and deductible, young drivers can find more affordable options.

How does gender impact auto insurance costs?

The cost of auto insurance is influenced by a range of factors, including age, gender, marital status, location, driving record, and credit score. While gender may not be the most significant factor, it can still play a role in determining rates, particularly for younger drivers. Here's how gender can impact auto insurance costs:

Gender Differences in Auto Insurance Costs

In most states, gender is a factor that insurance companies use to set auto insurance rates, with males typically paying more than females, especially during their teen and young adult years. This is because male drivers are generally considered higher-risk, as they tend to be involved in more accidents, exhibit riskier driving behaviours, and have a higher rate of accident severity compared to female drivers. According to the Insurance Information Institute, women are statistically less likely to get into accidents or receive DUIs, which leads to lower insurance premiums.

Age as a Factor

Age is a significant factor in auto insurance rates, and it interacts with gender to produce varying costs. Teen drivers, regardless of gender, generally pay the highest premiums due to their lack of driving experience. As drivers reach their mid-to-late twenties, the gender gap in insurance rates starts to narrow, with rates becoming similar for males and females in their thirties. However, as drivers enter their fifties, females may start to see slightly lower insurance costs again. By the time drivers reach their sixties and seventies, age becomes a more prominent factor, with rates increasing for both genders due to potential declines in reaction time and eyesight.

State Regulations on Gender-Based Pricing

It is important to note that not all states allow gender to be a factor in determining insurance rates. States like California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania have banned insurers from using gender as a pricing factor. In these states, auto insurance rates are unisex, and any differences in costs are primarily driven by other factors such as age, driving record, and location.

Strategies for Lowering Auto Insurance Costs

Regardless of gender, there are several strategies that drivers can use to lower their auto insurance costs:

• Comparison shopping: Rates can vary significantly between insurance providers, so it is essential to compare quotes from multiple companies to find the best deal.
• Considering insurance costs when buying a car: Certain makes and models of vehicles may have lower insurance premiums due to safety features or lower repair costs.
• Safe driving: Maintaining a clean driving record and avoiding accidents, speeding tickets, and DUIs can help keep insurance rates low.
• Seeking discounts: Insurance companies offer various discounts, such as those for paperless billing, good student grades, bundling policies, or enrolling in safe driving courses.
• Low-mileage discounts: Drivers who work from home or drive less than the national average may be eligible for lower rates.
• Adjusting coverage: For older vehicles, it may be more cost-effective to drop comprehensive and collision coverage and opt for a liability-only policy.

Frequently asked questions