Before you can compare auto insurance quotes, you need to understand some car insurance basics. Car insurance is part of a larger type of insurance called property and casualty, which also includes home insurance, boat insurance and renters insurance, among other types.
Insurance is a financial product. Car insurance does not actually protect your car; it protects your finances. Depending on the coverage you purchase, an auto insurance policy is designed to protect you from the financial devastation that could result from being in a car accident.
Insurance is also a pool. Everyone pitches in a little money — your premium amount — so that if and when an accident happens, everyone loses a little bit, but no one loses everything.
If you are shopping for auto insurance, you have probably heard that you should compare car insurance rates. But what are you looking for? How should you compare different car insurance quotes? And how do you know if you are getting a good deal?
Perhaps the first thing you should do when you are shopping for car insurance is decide what companies to request quotes from. To do this, you will need to decide what factors matter most to you. Are you looking for the best coverage for your needs? Or the cheapest policy possible? By deciding what you want from an insurance company, you may be able to narrow down which companies to approach.
An auto insurance policy is a package of several coverages. The types and amounts of coverage you choose will depend on your specific situation. Some common coverages are:
When comparing car insurance quotes, you will likely want to make sure that you have requested the same types and amounts of coverage from each company. That way, you can more easily see which company can offer a lower premium for the coverage you need.
Your car insurance premium is not just based on which company you choose. There are numerous other factors that can impact how much you pay for auto insurance, including:
In addition to the factors listed above, the state you live in has one of the biggest impacts on your car insurance premium. Your state’s minimum coverage laws, the likelihood of getting into an accident, the average severity of accidents and the percentage of uninsured motorists can all impact the average car insurance cost in your state.
|State||Car insurance company||Average annual full coverage premium|
|Louisiana||Southern Farm Bureau||$1,871|
|New Jersey||State Farm||$1,244|
|New York||Main Street America||$761|
|South Carolina||American National||$505|
|South Dakota||State Farm||$1,242|
In most states, your age plays a significant role in how much your car insurance costs. Younger drivers tend to be viewed as higher risk by insurance companies, with a greater likelihood for causing accidents, than older drivers. If you can manage to keep a clean driving record, your car insurance premiums will generally decrease in your early 20s, although they can begin to creep up again in your senior years.
|Age||Average annual full coverage premium for males||Average annual full coverage premium for females|
|70 year old||$1,564||$1,505|
*16- and 17-year-old premium when added to their parents’ policy
Your driving history will also affect how much you pay for insurance. Tickets and accidents can increase your premium for three to five years and sometimes longer. And with distracted driving on the rise, the likelihood of getting into an accident may also be increasing. Below are the five largest car insurance companies in the country, by market share, and their average full coverage premiums before and after an accident.
|Car insurance company||Average annual full coverage premium before an accident||Average annual full coverage premium after an at-fault accident||Percentage change|
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.
Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner.