How to compare car insurance rates
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?
Top car insurance companies
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
for your needs? Or the
possible? By deciding what you want from an insurance company, you may be able
to narrow down which companies to approach.
Types of car insurance coverage
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
Bodily injury liability: This is designed to cover the cost of injuries that you cause to
another party in an accident.
Property damage liability: This pays for the damage that you cause to someone else’s property
in an at-fault accident, like damage to another car, a building or personal
Uninsured motorist and underinsured motorist coverage: These coverages can pay for
your damages and injuries if you are hit by a motorist who does not have any
insurance or does not have enough insurance to cover your expenses.
Collision: This covers the damages to your car caused by colliding with
another vehicle or object.
Comprehensive: Often called “other-than-collision” coverage, this pays for
damages to your car caused by a variety of scenarios, including theft,
vandalism, storm damage, weather damage and hitting an animal. Adding
comprehensive and collision to your policy means you are purchasing “full coverage.”
Medical payments coverage: This pays for your and your passengers’ medical bills stemming
from an accident, regardless of fault. Depending on where you live, it may
be mandatory, optional or not available.
Personal injury protection (PIP): This coverage is similar to medical payments, but also covers lost
wages and the cost to hire someone to do household tasks if you or a
passenger is unable to complete them. It is often required in
no-fault states, may be optional, or, like medical payments, may not be available
depending on where you live.
Gap insurance: If you have a loan or lease on your vehicle, this coverage pays
the difference between your loan amount and the depreciated value of your
car if it is totaled.
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.
Factors that affect car insurance rates
Your car insurance premium is not just based on which company you choose. There
numerous other factors
that can impact how much you pay for auto insurance, including:
Age: Your age has a large impact on your car insurance premium, with
paying the most. This is why it can be beneficial for
parents to insure teenagers, rather than having your teen get their own policy. As you age into your
20s and 30s, car insurance rates begin to drop. However, rates may slightly increase
again after around
70-years-old. Some states do not allow age to be used as a rating factor.
Gender: Males tend to pay
higher rates than females, due to an increased likelihood of getting into more accidents and more
Vehicle type: The vehicle you drive is another big factor when it
comes to how much you will pay. Some vehicles are
cheaper to insure
Credit rating: It may be surprising, but your
can impact your car insurance premium. Drivers with
low credit scores
tend to find more claims than drivers with
higher scores, and so insurance companies charge higher premiums to compensate for the
increased risk. Not all states allow credit to be used as a factor in
determining your rate.
Driving record: If you have accidents, tickets or DUI convictions on
your record, you will likely pay more for insurance.
Insurance history: Drivers with continuous insurance tend to pay less
than drivers with
lapses in coverage
or no insurance history.
Coverages: The coverage and levels of coverage that you choose will
raise or lower your premium. Generally, higher levels and more optional
coverages will cost more.
Discounts: If you qualify for one or more
car insurance discounts, you may be able to lower your premium.
You may also save money on car insurance if you are
And if you are a
member of the military or a veteran, you could find specialized discounts or coverage options that are less
Car insurance rates by state
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
average car insurance cost
in your state.
||Car insurance company
||Average annual full coverage premium
||Southern Farm Bureau
||Main Street America
Car insurance rates by age
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.
||Average annual full coverage premium for males
||Average annual full coverage premium for females
|70 year old
*16- and 17-year-old premium when added to their parents’ policy
Car insurance rates by driving history
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
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:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
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.
: 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.