Jane Dotson
State Farm is one of the most affordable auto insurance companies in the US, with average annual rates of $1,657 for full coverage and $523 for minimum coverage. The company's rates are determined by several factors, including age, driving history, vehicle type, marital status, and credit history. State Farm also offers various discounts and savings opportunities, such as multi-policy and multi-car discounts, good driver discounts, and good student discounts, making their insurance even more affordable for customers.
| Characteristics | Values |
|---|---|
| Age | Drivers between 25 and 65 are considered lower risk and tend to have fewer accidents. |
| Driving history | A clean driving record will result in lower rates. |
| Vehicle type | Vehicles with more powerful engines or fewer safety features will lead to higher rates. |
| Marital status | Married drivers pay less for car insurance than single drivers. |
| Credit history | A low credit score can increase insurance rates. |
| Coverage type | Full coverage costs more than minimum coverage. |
| Location | Living in an area with heavy traffic can increase rates. |
| Annual mileage | Driving more frequently increases the likelihood of accidents and therefore increases rates. |
| Vehicle safety features | Advanced safety features can increase repair costs and therefore insurance rates. |
| Vehicle size | Larger vehicles tend to fare better in accidents than smaller ones. |
| Anti-theft devices | Vehicles with alarms or tracking devices are less attractive to thieves and are less expensive to insure. |
| Gender | Studies show that certain individuals have fewer accidents. |
What You'll Learn
Age, gender, and marital status
Age
Younger and older drivers are more likely to be involved in accidents and sustain injuries, so they tend to have higher insurance rates. Drivers between the ages of 25 and 65 generally experience fewer accidents and, therefore, lower insurance rates.
Gender
Although not explicitly stated, gender influences insurance rates. Men under 25 who get married benefit from lower auto insurance rates, implying that single men in this age group have higher rates.
Marital Status
Married drivers generally pay slightly less for car insurance than single drivers. Statistics show that married couples have better driving records than their single counterparts, which leads to lower auto insurance rates.
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Driving history
Accident and Violation Records:
An individual's driving record, including accident and violation history, plays a crucial role in State Farm's auto insurance rates. Multiple speeding tickets or at-fault accidents on record can result in higher insurance rates, indicating an increased risk for the insurer. Conversely, maintaining a clean driving record with no accidents or violations can help keep insurance rates low, as it demonstrates responsible and safe driving habits.
High-Risk Driving:
State Farm considers certain driving behaviours as high-risk, which can significantly impact insurance rates. For example, a conviction for driving under the influence (DUI) or multiple speeding tickets may result in a driver being classified as high-risk. High-risk drivers often face higher insurance rates due to the increased likelihood of accidents or claims.
Age and Experience:
Age is a contributing factor within an individual's driving history. Younger and less experienced drivers, particularly those under 25, often face higher insurance rates. State Farm recognises that this age group tends to have a higher number of accidents and violations. On the other hand, drivers between 25 and 65 usually benefit from lower rates, as they are statistically less likely to be involved in accidents and demonstrate more responsible driving behaviour.
Safe Driving Discounts:
State Farm encourages and rewards safe driving habits through various discount programmes. The Drive Safe & Save® app monitors driving behaviour and offers discounts of up to 30% for safe practices. Additionally, the Steer Clear® programme targets new and young drivers under 25, providing them with education and incentives to improve their driving skills and potentially lower their insurance rates.
Claims History:
An individual's claims history is closely linked to their driving history. State Farm considers the number of claims made when assessing insurance rates. A high number of claims indicates an increased likelihood of future claims, resulting in higher rates. Conversely, a low number of claims can help keep insurance costs down.
Driving Frequency:
The amount of driving an individual does also impacts their insurance rates. Those who drive infrequently or cover fewer miles per week are generally considered lower-risk. As a result, their insurance rates tend to be lower compared to those who drive long distances or spend more time on the road.
In summary, State Farm's auto insurance rates are significantly influenced by an individual's driving history. The company evaluates accident and violation records, identifies high-risk behaviours, considers age and experience, promotes safe driving through discounts, assesses claims history, and takes into account driving frequency. By analysing these factors, State Farm can adjust insurance rates accordingly, rewarding safe and responsible driving while managing risks effectively.
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Vehicle type
The type of vehicle you drive will have a significant impact on your insurance rates. This is because the vehicle's characteristics influence the probability of an accident occurring and the potential impact of such an event.
Firstly, the age of your vehicle is a key consideration. Older vehicles are generally cheaper to insure because they are less expensive to repair or replace than newer models. As a result, a 10-year-old car will have lower insurance premiums than a brand-new car.
The make and model of your vehicle also play a role in determining insurance rates. Some vehicles are more expensive to insure due to their higher repair and replacement costs. For example, electric vehicles and hybrid vehicles are generally more costly to insure because they are more expensive to acquire, repair, and replace. Additionally, safety features, such as anti-lock brakes and dual inside airbags, can lead to lower insurance rates, as they reduce the likelihood of accidents and the severity of their impact.
The classification of your vehicle can also impact insurance rates, but this varies depending on the insurance company. For instance, sports cars are often associated with higher speeds and an increased risk of accidents, resulting in higher insurance premiums. In contrast, practical, compact vehicles that are typically driven within local speed limits may have lower insurance rates.
It's worth noting that insurance companies use various tools, such as the Canadian Loss Experience Automobile Rating (CLEAR), to assess the probability of a particular make or model being damaged or stolen. This helps them determine the average cost per vehicle for claims, including crashes, theft, and property damage.
When it comes to insurance rates, it's essential to understand that each insurance company has its own methods for determining risk. Therefore, it's advisable to compare rates from multiple companies to find the best coverage option for your specific vehicle.
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Credit history
Maintaining good credit characteristics and financial responsibility can help keep insurance rates lower. State Farm may collect personal information, including transactional information such as products or services purchased and payment history, to assess a customer's credit history. This information is used for various purposes, including providing the requested products and services, processing claims, maintaining security, and offering other insurance and financial products.
State Farm also considers other factors when determining car insurance rates, such as age, location, driving behaviour, claims history, and vehicle characteristics. These factors help the company assess the risk associated with insuring a particular customer and adjust their rates accordingly.
It's important to note that State Farm is not the only insurance provider that considers credit history. Many other companies also use credit-based insurance scores as a factor in determining insurance rates.
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Coverage type
State Farm offers various coverage options, including auto insurance for teen drivers, rental cars, sports cars, and electric and hybrid vehicles. They also provide additional coverage for commercial vehicles, motorcycles, antique cars, and travel trailers.
When it comes to coverage type, State Farm's full-coverage insurance is notably cheaper than the national average. With an average annual rate of $1,657 for full coverage and $523 for minimum coverage, State Farm is considered one of the most affordable insurers in the United States. Their rates are below the statewide averages in 36 out of 48 states and Washington, D.C., making them a popular choice for budget-conscious consumers.
State Farm also provides opportunities for customers to save money through their Drive Safe & Save® program, which offers discounts of up to 30% for safe driving habits. Additionally, State Farm offers various discounts for bundling policies, having multiple vehicles, being a good student, and having modern safety features in your vehicle.
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Frequently asked questions
Several factors influence auto insurance rates, including age, driving history, vehicle type, marital status, credit history, and coverage type.
State Farm considers factors such as age, driving history, vehicle type, marital status, and credit history to determine insurance premiums.
Maintaining a good driving record, practicing safe driving habits, bundling insurance policies, and maintaining good credit can help lower auto insurance rates.
The average annual rates for full coverage are $1,657, and for minimum coverage, it is $523.
State Farm offers various discounts, including multi-policy, multi-car, good driver, good student, and vehicle safety discounts.
