What are car insurance rates and how do they work?
Although “rate” and “premium” are often used interchangeably to refer to the cost of a car insurance policy for a customer, they are not quite the same. A car insurance rate is a unit of cost that an insurance company calculates based on individual rating factors, such as driving record and location, to determine a driver’s risk and the cost of insuring them.
After determining a driver’s rate, car insurance companies also consider a driver’s selected coverage options and limits to calculate the estimated premium. The premium is what a customer would pay for coverage during the policy term, which is usually six or 12 months.
Why comparing auto insurance rates is important
Because car insurance rates are based on more than a dozen individual rating factors — and each company has its own method for calculating rates — it’s advantageous to shop around. You’ll be able to compare car insurance rates for the same amount of coverage with different carriers. You’ll also be able to see which company might offer lower rates or unique discounts to help with the final cost.
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Car insurance rates by location
Where you live plays a large factor in determining your car insurance rate. In most states, car insurance companies are able to use your ZIP code as part of its rate calculations. This allows them to consider data such as crash statistics, claims filing, repair costs, theft and burglary data and more when calculating car insurance premiums.
These differences in insurance rates by location can also be seen on a broader state level. Drivers in some states tend to pay more than others for auto insurance due to location-specific driving conditions, cost of repairs, local laws and other risks. Here’s an overview of how much premiums can differ between states: The average annual cost of full coverage car insurance in the U.S. is $1,771.
| State | Average annual rate for full coverage | Average monthly rate for full coverage |
|---|---|---|
| Alabama | $1,760 | $147 |
| Alaska | $1,770 | $148 |
| Arizona | $1,743 | $145 |
| Arkansas | $1,806 | $151 |
| California | $2,190 | $182 |
| Colorado | $2,019 | $168 |
| Connecticut | $1,533 | $128 |
| Delaware | $1,963 | $164 |
| Florida | $2,762 | $230 |
| Georgia | $1,985 | $165 |
| Hawaii | $1,206 | $100 |
| Idaho | $1,065 | $89 |
| Illinois | $1,548 | $129 |
| Indiana | $1,242 | $103 |
| Iowa | $1,254 | $104 |
| Kansas | $1,802 | $150 |
| Kentucky | $1,954 | $163 |
| Louisiana | $2,864 | $239 |
| Maine | $876 | $73 |
| Maryland | $1,931 | $161 |
| Massachusetts | $1,296 | $108 |
| Michigan | $2,345 | $195 |
| Minnesota | $1,692 | $141 |
| Mississippi | $1,701 | $142 |
| Missouri | $1,861 | $155 |
| Montana | $1,795 | $150 |
| Nebraska | $1,538 | $128 |
| Nevada | $2,426 | $202 |
| New Hampshire | $1,182 | $98 |
| New Jersey | $1,891 | $158 |
| New Mexico | $1,489 | $124 |
| New York | $2,996 | $250 |
| North Carolina | $1,392 | $116 |
| North Dakota | $1,225 | $102 |
| Ohio | $1,200 | $100 |
| Oklahoma | $1,902 | $159 |
| Oregon | $1,371 | $114 |
| Pennsylvania | $2,002 | $167 |
| Rhode Island | $1,847 | $154 |
| South Carolina | $1,464 | $122 |
| South Dakota | $1,542 | $129 |
| Tennessee | $1,383 | $115 |
| Texas | $1,868 | $156 |
| Utah | $1,449 | $121 |
| Vermont | $1,000 | $83 |
| Virginia | $1,340 | $112 |
| Washington | $1,313 | $109 |
| Washington, D.C. | $1,948 | $162 |
| West Virginia | $1,527 | $127 |
| Wisconsin | $1,249 | $104 |
| Wyoming | $1,510 | $126 |
Car insurance rates by gender
Gender is often an important factor in car insurance rates. Men typically face more expensive premiums than women because data shows they may engage in riskier driving behaviors. A study from the Insurance Institute for Highway Safety showed that men in almost every age group were involved in more fatal car accidents compared to the same age demographic of women.
Below is a table showing 2021 rates obtained from Quadrant Information Services for male and female drivers of different age groups. However, not all states permit the use of gender as a car insurance rating factor. California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania do not allow insurers to use gender as a rating factor.
| Age | Average annual full coverage premium for males | Average annual full coverage premium for females |
|---|---|---|
| 18-year-old | $5,646 | $4,839 |
| 25-year-old | $2,181 | $2,036 |
| 40-year-old | $1,648 | $1,701 |
| 60-year-old | $1,552 | $1,537 |
| 70-year-old | $1,701 | $1,670 |
Car insurance rates by age
Age is another component that insurers typically use to calculate car insurance rates. Young drivers under the age of 25 typically face more expensive premiums compared to adults, as seen in the rate tables below for drivers ranging from 18, 20, 30, 40 and 50 years old. The difference in premium is driven largely in part to their lack of experience compared to older drivers, which may result in more dangerous driving behaviors. Hawaii and Masssachusetts do not allow insurers to use age as a rating factor. Bankrate has compiled age-related data from several carriers based on 2021 rates pulled from Quadrant Information Services to give you an idea of how much you might pay at different points in your life.
Car insurance for teen drivers
Teen drivers are inexperienced, which can lead to a greater likelihood of accidents. In fact, the Centers for Disease Control and Prevention (CDC) reports that teens have a higher crash rate than any other age group. Because of this, teens typically cost more to insure than older drivers. Teens in Hawaii and Massachusetts do not see these same premium impacts due to the states’ bans on insurers using age as an auto rating factor. In all other states and Washington, D.C., teens will likely pay higher premiums than older drivers. Bankrate found that, depending on your teen’s age, major insurers like Geico, Nationwide and USAA tend to have lower average rates.
When getting quotes, car insurance companies will ask the age of every licensed driver that will be listed on the policy. This is important information to help insurers assess your household’s risk. Even adult motorists who recently got their driver’s license are inexperienced on the road, which can result in higher premiums for several years. If you have a teen who has a learner’s permit and is about to get their driver’s license, including them in your quote as a licensed driver may help you understand what your policy will actually cost once they get their license. This will help you avoid surprises about the policy’s cost later down the road.
| Average annual premium for full coverage | ||||
|---|---|---|---|---|
| Car insurance company | 16-year-old* | 17-year-old* | 18-year-old | 19-year-old |
| USAA | $2,226 | $1,599 | $3,367 | $2,637 |
| Geico | $2,009 | $1,779 | $3,675 | $3,008 |
| Nationwide | $1,241 | $1.104 | $4,449 | $3,692 |
| State Farm | $2,077 | $1,769 | $4,137 | $3,247 |
| Progressive | $1,955 | $1,961 | $6,287 | $3,761 |
| Allstate | $2,459 | $2,182 | $6,152 | $5,349 |
*16-year-old rate reflects the added cost of a teen on their parents’ full coverage policy.
Car insurance for drivers in their 20s:
Drivers in their 20s will begin to see their premiums decrease, especially after age 25. Keep in mind that drivers in their early 20s will still see high average rates for full coverage car insurance if they own their own vehicle and are on their own car insurance policy as auto insurers consider them higher risk compared to older adults.
| Carrier | Average annual full coverage premium for 20-year-olds | Average annual full coverage premium for 25-year-olds |
|---|---|---|
| USAA | $2,422 | $1,510 |
| Erie | $2,422 | $1,459 |
| Auto-Owners | $2,740 | $1,759 |
| Geico | $2,724 | $1,655 |
| State Farm | $2,908 | $1,694 |
Car insurance for drivers in their 30s:
Drivers in their 30s will enjoy fairly low average annual full coverage car insurance premiums by age, as long as they maintain a clean driving record.
| Carrier | Average annual full coverage premium for 30-year-olds |
|---|---|
| USAA | $1,295 |
| Erie | $1,316 |
| Auto-Owners | $1,385 |
| Geico | $1,465 |
| State Farm | $1,494 |
Car insurance for drivers in their 40s:
Drivers in their 40s with a clean driving record will see even lower average full coverage car insurance rates than their counterparts in their 30s.
| Carrier | Average annual premium for full coverage for 40-year-olds |
|---|---|
| USAA | $1,176 |
| Erie | $1,229 |
| Auto-Owners | $1,395 |
| Geico | $1,421 |
| State Farm | $1,453 |
Car insurance for drivers in their 50s:
Drivers in their 50s with a clean driving record and, in most states, good credit, typically enjoy the lowest average full coverage car insurance rates of any age group. This group statistically presents the lowest risk for insurers.
| Carrier | Average annual premium for full coverage for 50-year-olds |
|---|---|
| USAA | $1,093 |
| Erie | $1,180 |
| Auto-Owners | $1,313 |
| Geico | $1,338 |
| State Farm | $1,410 |
Car insurance for senior drivers:
Senior drivers, typically defined as age 60 and older, may see their car insurance rates begin to creep back up, although some insurers don’t begin to adjust rates until you reach age 70. That is because senior drivers statistically are at greater risk of being in an accident. Aging-related health factors, like decreased eyesight, can impair a driver and increase the risk of accidents. Based on our analysis, older adults may want to consider getting quotes from USAA, Erie and Auto-Owners for low-cost coverage as these carriers offer favorable rates for senior drivers.
| Carrier | Average annual full coverage premium for 60-year-olds | Average annual full coverage premium for 70-year-olds |
|---|---|---|
| USAA | $1,073 | $1,202 |
| Erie | $1,157 | $1,249 |
| Auto-Owners | $1,276 | $1,397 |
| Geico | $1,326 | $1,478 |
| State Farm | $1,327 | $1,370 |
Car insurance rates by driving history
Keeping a clean motor vehicle record (MVR) is one of the best ways to avoid premium increases on your car insurance policy. Because car insurance rates are based on risk, high-risk drivers generally pay more for coverage and may have trouble obtaining coverage from standard auto insurers. Insurers will review the driving history of all drivers on the policy by obtaining MVR and CLUE reports (which provides your auto claims history) so providing this information upfront will help ensure you receive an accurate quote.
Auto insurance rates after a speeding ticket
Speeding tickets are relatively common, but they can still be an indication of high-risk driver behavior. As such, a speeding ticket on your MVR increases average premiums by about 21% per year. On top of the increased insurance costs, you may need to pay fines and even license and/or vehicle registration reinstatement fees, depending on the severity of your infraction.
Speeding tickets can significantly affect your quotes. If your ticket has not been processed, meaning it is not yet listed on your MVR, your rate will be affected once that ticket is added to your driving record. A car insurance company may notice the change and charge more for a moving violation if your MVR is re-pulled, which usually happens at your policy’s renewal. On the other hand, when tickets reach a certain age (time period varies by state and auto insurer, but typically ranges from three to 10 years), they may “fall off” your record. This means that the insurance carrier is no longer adding a surcharge for them, which can positively affect your rates and may be a good time to shop your coverage with other carriers.
Auto insurance rates after an at-fault accident
Accidents on your MVR will typically increase your premiums. If you have caused one or more at-fault accidents, car insurance companies may view you as more likely to cause an accident again in the future and so your rates are raised accordingly.
The table below shows average rates before and after an at-fault accident from several major car insurance companies. On average, rates increase 42% annually after an at-fault accident. It is important to note that even if you have accident forgiveness with your current insurer (meaning they won’t raise your rate because of an at-fault accident), that accident will likely affect your quoted rates with other insurers, as it is included on your MVR. Accident forgiveness does not transfer between carriers and has to be earned or purchased with new providers.
Auto insurance rates after a DUI
DUIs are among the most serious offenses that a driver can commit and come with an average annual premium increase of 93%, as well as the potential of a suspended license and registration, numerous fines and other penalties based on your state’s regulations. They can also stay on your driving record for life in some states. Finding car insurance with a DUI on your MVR may be much more difficult than it is with a clean driving record, as not all insurance companies will agree to insure such risky drivers.
Car insurance rates by credit score
In most states, your credit tier will affect your car insurance premium. Generally, drivers with lower credit-based insurance scores tend to file more claims and are thus viewed as a higher risk by carriers. California, Hawaii, Massachusetts and Michigan ban or restrict the use of credit as an auto insurance rating factor.
| Poor credit | Average credit | Good credit | Excellent credit | |
|---|---|---|---|---|
| National average annual full coverage premium | $3,002 | $1,907 | $1,771 | $1,556 |
Car insurance rates by vehicle
One of the biggest premium rating factors for auto insurance is the type of vehicle you drive. Your vehicle’s make and model can impact everything from safety features to repair costs. The table below shows the average annual full coverage premiums for vehicles best suited to a broad range of lifestyles and budgets. On your quote, you may notice that your vehicle type affects your coverage costs. For example, collision and comprehensive costs may be higher on a vehicle with more expensive replacement parts than on a vehicle that has cheaper and more readily-available parts.
The price of medical coverage may be partly based on the vehicle’s safety features, which help protect you and any passengers in your vehicle. If you are shopping for a new vehicle, you may want to obtain quotes for each vehicle you consider purchasing, as they will have different rates.
| Make and model | Average annual full coverage premium | Average monthly full coverage premium |
|---|---|---|
| BMW 330i | $2,270 | $189 |
| Ford F-150 | $1,523 | $127 |
| Honda Odyssey | $1,542 | $129 |
| Toyota Prius | $1,924 | $160 |
How to choose the best car insurance carrier for you
Shopping for car insurance is more than just looking for the cheapest rate. Also consider what is important to you. Do you need higher coverage to better protect your finances and assets? Do you want a wide variety of coverage options to build a tailored car insurance policy? Are you new to the insurance process and want guidance through the whole process, or do you prefer to handle everything on your own? The answers to these questions can help you compare car insurance companies to see which one you want to work with.
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Frequently asked questions about car insurance rates
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2022 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 2020 Toyota Camry, commute five days a week and drive 12,000 miles annually.
Age-related carrier rates represent 2021 data and a 2019 Toyota Camry.
These are sample rates and should only be used for comparative purposes.
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