How Much Does Car Insurance Cost?

If you’re shopping for a new vehicle or simply reevaluating your current policy, you’re probably asking: how much does car insurance cost? It’s a common question—and unfortunately, the answer isn’t one-size-fits-all. Car insurance pricing is highly individualized, based on a wide variety of factors.

According to the National Association of Insurance Commissioners (NAIC), the average cost of car insurance in the U.S. was about $1,062 annually for a full coverage policy in recent years. That includes liability, collision, and comprehensive coverage. However, these numbers are only benchmarks, and your actual cost can be significantly different depending on your unique profile.

Data from the Insurance Institute for Highway Safety (IIHS) shows that accident rates and driving behaviors vary significantly by age, location, and vehicle type. This is why insurance companies personalize your car insurance premiums based on multiple risk factors that we’ll explore below.

National Average Car Insurance Costs

Here’s a breakdown of typical costs based on national data:

• Liability-only coverage: $600–$700 per year on average
• Full coverage (liability + collision + comprehensive): Roughly $1,000–$1,500 annually
• Monthly average: $80–$125 depending on your location and profile

These are just generalized estimates. Real quotes vary by provider and personal details.

Key Factors That Affect Car Insurance Rates

Insurance companies don’t just look at your car—they look at you, your habits, and your surroundings.

You – The Driver

Your personal profile significantly impacts your rates:

• Age: Younger drivers, especially teens, pay higher premiums
• Gender: Statistically, men are involved in more severe accidents
• Driving record: A clean record lowers your cost
• Credit score: Insurers often use a credit-based insurance score to determine your rate

According to the Consumer Financial Protection Bureau (CFPB), your credit history influences your perceived risk—so maintaining good credit can save you money.

Your Car

The vehicle you drive can increase or reduce your premium:

• Luxury and sports cars cost more to insure due to expensive repairs
• Older cars are generally cheaper to cover
• Cars with advanced safety features may earn discounts

Your Location

Your ZIP code tells insurers a lot about risk:

• Urban areas = more accidents and theft
• Rural areas = fewer incidents, potentially lower costs
• States prone to hurricanes or wildfires = higher premiums

Types of Car Insurance Coverage

Understanding what you’re buying is key to managing your cost:

• Liability (mandatory in most states): Covers injuries or damage to others
• Collision: Covers your car after an at-fault accident
• Comprehensive: Covers non-collision incidents like theft, vandalism, or weather damage
• Personal Injury Protection (PIP): Pays medical bills for you and your passengers
• Uninsured/Underinsured Motorist: Protects you if the other driver has insufficient coverage

Full coverage typically includes liability, collision, and comprehensive.

State-by-State Car Insurance Costs

Where you live has a huge impact on your car insurance rates.

State	Average Annual Premium (Full Coverage)
Michigan	$2,300+
Florida	$2,000+
California	$1,750
Texas	$1,450
Ohio	$1,050
Maine	$950

Michigan’s no-fault insurance system makes it the most expensive state.

Special Situations That Affect Cost

Expensive Cars

High-end or exotic vehicles:

• Require specialized parts
• Have higher repair costs
• Pose greater theft risk
  ➡️ All of which increase premiums

Teen or New Drivers

Young drivers:

• Are statistically riskier
• Often face double or triple the rates of experienced drivers
  ➡️ Ways to save:
  • Add to a parent’s policy
  • Take driver’s ed
  • Use “good student” discounts

Senior Citizens

Seniors:

• May qualify for mature driver discounts
• Could see rates rise after age 70 due to vision or reflex decline
  ➡️ Safe driving courses may reduce premiums

How to Lower Your Car Insurance Premium

Smart strategies to pay less:

• Compare quotes online or through brokers
• Bundle home and auto insurance policies
• Ask about discounts (see below)
• Raise your deductible if you can afford a higher out-of-pocket cost
• Improve your credit score

Popular Car Insurance Discounts

Most major insurers offer some of these discounts:

• ✅ Safe driver discount
• ✅ Multi-vehicle discount
• ✅ Good student discount
• ✅ Low mileage discount
• ✅ Defensive driving course discount
• ✅ Anti-theft device installation discount

Always ask for available discounts—many aren’t automatically applied.

How to Shop for Car Insurance

There are multiple ways to get car insurance:

• Direct from insurers (GEICO, Progressive, etc.)
• Through independent agents or brokers
• Online quote comparison sites

Tips before you buy:

• Know your vehicle’s VIN
• Have your driver’s license and driving history ready
• Understand coverage types and limits

Don’t always go for the cheapest option—compare coverage details and customer service ratings too.

FAQs: What People Also Ask

How much is car insurance per month?

Between $80–$125 per month on average, though this varies widely by state and profile.

What’s the cheapest car insurance?

Liability-only coverage is the cheapest, but provides minimal protection.

At what age is car insurance cheapest?

Rates usually drop at age 25 and remain low until around age 70.

Does credit score affect car insurance?

Yes. Higher credit scores = lower premiums in most states.

What’s included in full coverage?

• Liability
• Collision
• Comprehensive

It doesn’t cover mechanical issues, wear and tear, or unrelated medical expenses.

Final Thoughts

So, how much does car insurance cost? It depends—on you, your car, your location, and your choices.

To get the best rate:

• Shop around
• Understand your needs
• Take advantage of every discount available
• Periodically reevaluate your policy

With a little research and planning, you can find the perfect balance between affordable premiums and comprehensive protection.