The Average Car Insurance Costs You Need to Know
What is the Average Car Insurance Price? The average price of automobile insurance is around $1,549 per year. That is less than $700 per month or just over half a million dollars per year. Car insurance prices vary greatly depending on person rating factors. There are many factors that play into the cost of automobile insurance and one of the biggest drivers of cost is the amount of liability coverage that a customer chooses.
Liability insurance is one of the most expensive premiums that customers pay. This is because claims related to incidents involving automobiles and other property can be very expensive to resolve. Liability insurance rates are based upon the risk of loss, which is determined by calculating the chances that a claim will be paid out and the odds that the claim will be resolved in a timely manner. Claims submitted without insurance protection are subject to high processing fees and legal costs that can drive up the average car insurance rates. A customer who has an expensive claim rejected due to lack of liability protection will end up paying additional premiums and this can quickly drive the average car insurance rates through the roof.
One of the most important factors that drives up the cost of auto insurance coverage is a drivers’ driving history. Insurance companies use drivers’ driving history to predict their insurance risk. The larger the risk of loss and financial loss for an insurer, the higher the insurance premium. Drivers with a poor driving record are rated as high risk, and therefore they pay more for auto insurance. High risk drivers include teenage drivers, those who have numerous speeding tickets or accidents, drivers with a bad driving history, and drivers who have committed fraud or any act that would raise the likelihood that they will not be able to pay for damages that they suffer.
One of the reasons that drivers pay more for car insurance policies is because they are considered “high risk.” Drivers with a poor driving record are rated as high risk, and they pay more for car insurance. Teenagers are also often targeted by car insurers because they are statistically more likely to get into a car accident. Younger drivers may also find that insurers require them to take more comprehensive coverage, which means that they will pay more for car insurance than older, more conservative drivers.
The type of vehicle that the driver drives is another important factor in determining the average car insurance price. The more expensive the vehicle, the more the premium will be. For example, a four-door sedan will cost less per year on a policy than a convertible, even though it will be heavier and more expensive to drive. If the car is a high performance model, the premium will be higher. A driver who buys a vehicle based solely on the value or style of the car will also pay more for car insurance because there are more options available on the market.
Some drivers are considered “high risk” because they are older or have a bad driving history. Older drivers often have to pay higher premiums because they are more likely to have an accident. It can also make insurance prices more expensive for female drivers, whose vehicles are more often stolen than those of men. Insurance companies also consider driving experience, which refers to how many traffic violations a driver has been convicted of, when figuring out an individual’s insurance prices. Traffic violations can affect a person’s eligibility for low-cost auto insurance.
Every state requires some form of minimum coverage. In order to obtain a quote on a car insurance policy, each driver must complete a questionnaire that contains questions about the type of car they own, the amount of no fault coverage they want, the amount of liability coverage they require, the deductible they pay, and the state they live in. Different factors will affect the cost of a policy. Drivers should look at every state’s regulations to see which ones apply to them, but most states require drivers to carry at least the bare minimum of coverage required by law.
The final major factor used to determine average car insurance costs is the location in which the driver lives. Areas that have higher crime rates tend to cost more to insure. Drivers who frequently travel to areas with high rates of theft or vandalism may need to pay more for their coverage. A driver may also qualify for a discount if they live in a college town, if they are active in an organization or club, if they have a high school certificate, or if they have other forms of public documentation that demonstrates a driving history of safe driving.