What’s the Average Cost of Auto Insurance?

The average cost of auto insurance is $1,592 annually – this amounts to just $133 per month. But, of course, rates can vary widely based on your credit score, the type of insurance coverage you opt for, the discounts you get, and more.

If you want to know how much you can expect to pay for auto insurance, this article is for you.

How Much Does Auto Insurance Cost in Different States?

Where you reside can have a significant impact on your car insurance policy rate, because each state has its own insurance regulations. Average prices in the more expensive areas are about two times higher than those in the more affordable ones. How much insurance you have plays a role in how much you will be charged as well. For instance, full coverage auto insurance is usually twice the cost of minimum coverage.

However, among the various states, Maine is one of the most affordable states for full coverage auto insurance, with the annual average premium only amounting to about $963. Ohio and Idaho are also quite inexpensive.

Louisiana is the most expensive state in the country for full coverage auto insurance, with the cost clocking in at $2,762. Louisiana is followed by Michigan and Kentucky.

For minimum auto insurance coverage, Iowa is the cheapest state, with an annual plan only coming up to $255. Iowa is followed by Idaho and South Dakota. Michigan was the most expensive state for minimum auto insurance coverage, with the cost coming up to $1,128 annually. Michigan is followed by Louisiana and New York.

How Do Car Insurance Companies Determine Policy Rates?

Car insurance companies determine rates based on various factors including your location, driving history, demographics, and type of vehicle. When determining your premium, car insurance companies are, in fact, making an educated guess about just how likely you are to raise a claim in the future. If the insurer thinks you are likely to file many claims, you will need to pay a higher premium. Of course, each insurance company treats various factors differently, which is why it’s important that you compare policies before buying them.