17 Factors That Affect Car Insurance Rates

Securing the best car insurance rate for yourself or your loved ones depends on many factors. The better you understand what insurers use to calculate your premiums, the easier it will be to manage those factors in your favor.

To calculate your premium, auto insurers generally consider your age, gender, driving history, type of car, credit history, amount of coverage, and more. Read on to see how you can improve the rates you receive.

Personal factors

Several personal factors contribute to the calculation of your car insurance rates in most states. Here’s a look at each.

Age

Generally, younger drivers — those younger than 25 — with little to no experience behind the wheel pay more for car insurance than older drivers do because they tend to get into more accidents.^[1]

In 2020, drivers 16 to 20 years old accounted for 8.5% of all drivers involved in deadly crashes, according to the National Highway Traffic Safety Administration (NHTSA). These same drivers represented only 5.1% of all licensed drivers that year.^[2]

Meanwhile, senior drivers may also pay more for their car insurance policies, with rates rising as they age. This is because older drivers run a higher risk of being involved in a car accident and of being seriously injured. The number of traffic deaths involving drivers 65 and older rose an estimated 14% from 2020 to 2021, according to the NHTSA.^[3]

The national average cost of car insurance for teen drivers is $382 for full coverage and $188 for liability-only policies. By comparison, senior drivers pay an average of $161 and $79 for full and liability-only coverage, respectively.

The following table illustrates how age affects monthly average liability-only rates from top national insurance companies.

Gender

Statistics show women drive more safely, and are less likely than men to get into:

• An accident

• A serious accident

• A DUI accident^[1]

As such, women often pay less for car insurance than men. The average national car insurance cost for women is $206 for full coverage and $102 for liability-only insurance. By contrast, the averages for male drivers are $217 and $107, respectively. The following table illustrates how gender affects average monthly liability rates from top insurers.

Keep in mind, several states prohibit insurers from using gender as a rating factor in car insurance.

Marital status

Insurers generally view married drivers as less risky than their single counterparts. As such, being married may allow you to reduce your car insurance rates.

Occupation

Some car insurance companies take your occupation into account when setting your rates. In the eyes of a car insurer, high-risk occupations might include:

• Real estate agents

• Sales representatives

• Doctors

• Attorneys

Insurers may consider these and other occupations risky because of their generally long work hours, on-the-job stress, lack of sleep, and the amount of time they spend driving. This higher risk can lead to paying more for car insurance.

Meanwhile, people working in “low-risk” occupations might pay less for car insurance. These occupations include:

• Scientists

• Accountants

• Teachers

• Artists

Why might their rates be lower? On average, people in these professions stick to a normal sleep schedule, drive less, and may have more manageable levels of stress.

Driving history

Your driving history plays a key role in how your car insurance rates are set.^[1] Among the things that can ding your car insurance rates are:

• Racking up traffic violations, such as speeding or DUI citations

• Being involved in at-fault car accidents

• Filing claims

Any one of these factors might end up labeling you a high-risk driver, meaning you could end up paying more for car insurance than someone with a clean driving record. For example, the national average cost of car insurance for drivers with clean motor vehicle records is $158 per month. But drivers with DUIs on their records can see their overall average costs climb to $261 per month.

The following data illustrates how different driving infractions can affect monthly liability-only costs from top insurance companies.

Vehicle-related factors

A number of vehicle-related factors affect your car insurance rates as well. Here’s a look at each.

Make and model

A car of one make and model may cost more to insure than another. Why? Here are a few possibilities:

• Your car is more likely to be stolen.

• Your car generally costs more to repair.

• Your car has a relatively poor safety record.^[1]

• Your car is more expensive to replace, like a sports car.

• Your car has or doesn’t have key safety features.

If any of these factors (or others) apply to your car, you might end up with higher car insurance rates.

Vehicle age

Generally, the older your car is, the less you’ll pay for car insurance. This is because a car’s value typically goes down as it ages, meaning it’ll probably cost less to repair or replace. In addition, you might be able to get rid of comprehensive and collision coverages for an older car if it’s paid off. This will likely lower your car insurance premium.

Vehicle usage

How you use your car — namely how much mileage you put on the odometer — can affect your car insurance rates.

If you use your car mostly for purposes like running errands and commuting to work, you might spend more time on the road. That, in turn, makes you more likely to be involved in an accident. However, if you use your car only for leisurely weekend drives, you typically spend less time on the road and might enjoy lower car insurance rates because you present a reduced risk.

Anti-theft devices

The installation of anti-theft devices, such as an alarm system or remote locks, can result in lower car insurance rates. In most cases, car insurers offer discounts if your car features anti-theft devices because you’re taking steps to reduce your risk of filing a claim.

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Coverage and deductible factors

Your level of coverage, deductible amount, and insurance bundles affect your car insurance rates, as you’ll see here.

Level of coverage

Nearly every state requires its drivers to carry a minimum of liability coverage. In addition, your lender may also require you to buy comprehensive and collision coverages, which otherwise are optional. Other types of insurance, such as uninsured/underinsured motorist coverage, may be required under state law or may be optional.

Nationally, full-coverage car insurance averages $211 per month, and liability-only insurance averages $104. The following table compares the national average monthly cost of full-coverage car insurance with liability-only coverage from top insurers.

Deductible amounts

Your policy’s comprehensive and collision deductibles can affect your car insurance premium. If, for instance, you raise your deductible for comprehensive coverage from $200 to $500, you should see a decrease in your premium. This is because you’re agreeing to take on more of the up-front costs yourself.

However, make sure you consider whether you have enough money set aside to cover your out-of-pocket costs before increasing your car insurance deductible. A deductible you can’t afford is a claim you can’t file.

Insurance bundles

An insurance bundle typically involves insuring your car and home with the same company. If you do this, you could receive a policy discount from your insurer. Inquire about bundling options with your insurer. You may also be able to bundle your auto insurance with renters insurance, home insurance, or another type of coverage.

Geographic factors

The area where you live and the local weather also come into play when you’re buying car insurance.

Location

Your ZIP code affects how much you pay for car insurance in most states. For instance, if you live in an urban area with a high rate of car thefts, your coverage might cost more than if you lived in a rural area with a low rate of car thefts. However, California and Michigan prohibit insurers from using ZIP code as a rating factor in auto insurance.

Other location factors that can affect your auto insurance rates include how much car repairs cost in your area and how much car insurance fraud happens there. Here are the average monthly costs of car insurance in different states and in Washington, D.C.

State ▲▼	Full Coverage ▲▼	Liability Only ▲▼	Overall Average ▲▼
Alabama	$156	$60	$108
Arizona	$186	$92	$139
Arkansas	$280	$122	$201
California	$296	$142	$219
Colorado	$225	$94	$159
Connecticut	$368	$215	$292
Delaware	$246	$166	$206
Florida	$257	$165	$211
Georgia	$243	$148	$196
Hawaii	$121	$67	$94
Idaho	$135	$69	$102
Illinois	$183	$79	$131
Indiana	$148	$71	$110
Iowa	$139	$58	$99
Kansas	$196	$84	$140
Kentucky	$309	$192	$250
Louisiana	$265	$141	$203
Maine	$161	$89	$125
Maryland	$348	$195	$272
Massachusetts	$238	$115	$176
Michigan	$309	$173	$241
Minnesota	$203	$102	$152
Mississippi	$230	$85	$157
Missouri	$226	$100	$163
Montana	$182	$86	$134
Nebraska	$210	$94	$152
Nevada	$321	$199	$260
New Hampshire	$135	$65	$100
New Jersey	$230	$120	$175
New Mexico	$185	$69	$127
New York	$266	$207	$236
North Carolina	$99	$55	$77
North Dakota	$160	$89	$124
Ohio	$145	$74	$109
Oklahoma	$189	$88	$138
Oregon	$173	$102	$137
Pennsylvania	$174	$91	$132
Rhode Island	$206	$169	$188
South Carolina	$281	$168	$225
South Dakota	$176	$68	$122
Tennessee	$167	$74	$121
Texas	$245	$119	$182
Utah	$193	$108	$151
Vermont	$152	$68	$110
Virginia	$179	$97	$138
Washington	$161	$76	$118
Washington, D.C.	$165	$87	$126
West Virginia	$160	$74	$117
Wisconsin	$149	$62	$105
Wyoming	$178	$70	$124

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Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.

Local weather conditions

If your area is prone to weather conditions or natural disasters that could damage vehicles, your car insurance rates might be higher. That’s because such property damage typically prompts more claims. So, if an insurer pays out more claims, it might charge higher premiums to make up for its bigger losses.

Florida, for example, faces a greater risk of hurricanes, which is one of many reasons why Floridians pay some of the highest car insurance premiums in the nation.

State laws and regulations

Laws and regulations in your state also factor into how much you pay for car insurance.

Minimum insurance requirements

Most states require motorists to carry a minimum amount of bodily injury liability and property damage liability coverage. Furthermore, some states might mandate other types of car insurance, such as uninsured/underinsured motorist coverage, medical payments, or personal injury protection (PIP) coverage.

You have no control over the minimum insurance requirements in your state, but it’s a good idea to understand them so you can better forecast your potential costs.

No-fault vs. tort states

In the car insurance world, some states are no-fault states and others are tort (or at-fault) states. If you live in a no-fault state, you typically must file a claim with your own insurance company if you or a passenger is injured in a car crash. That’s regardless of whose fault the accident was.^[4] But if you live in a tort state, car insurers representing everyone in a car accident assign fault and base claim payouts on that determination.

Premiums tend to be higher in no-fault states than in tort states because no-fault claim payouts are usually higher. The following table shows total monthly averages for no-fault and at-fault states.

Credit score

In many states, insurers can take your credit history into account when setting your car insurance rates. However, they don’t rely on traditional credit scores as part of the rate-setting process. Rather, they use information in consumer credit profiles to generate credit-based insurance scores. These insurance scores help forecast how likely you are to file a car insurance claim.

Improving your credit score might bump up your credit-based insurance score and lower your premium. The national average cost of full-coverage car insurance for drivers with poor credit is $253, while rates average $181 per month for drivers with excellent credit.

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