United States Car Insurance Premiums

United States car insurance premiums vary widely. They are influenced by many factors, including your age, gender, driving record, vehicle type, credit score and where you live.

Drivers who have a bad credit history, on the other hand, pay more for coverage in some states. Insurers use a "credit-based insurance score" similar to a regular credit score to set rates in most states.

Age

Car insurance premiums vary based on a number of factors. Besides your age and gender, they can also be affected by your driving record, the type of vehicle you drive and your credit score.

Drivers under 25 often pay more for car insurance than those who are older because they have less experience behind the wheel and may have more accidents. Regardless of your age, it is important to have a good driving record and a high credit score when looking for auto insurance quotes.

Male drivers under the age of 18 usually pay the highest car insurance rates, although 16-year-old female drivers are not far behind. However, once men and women reach the age of 30, they pay almost equal rates.

The cost of a full coverage car insurance policy can differ by state and age, but most drivers should expect to pay somewhere between $1,771 and $3,192 annually for basic coverage.

Bankrate used rates from Quadrant Information Services to compare yearly costs for full coverage policies by age and gender.

Car insurance rates decline rapidly from age 16 to 25, but they begin to rise again around the age of 60. This is a result of the physical changes that affect older drivers.

For example, many people start dealing with arthritis or other medical issues that affect their driving ability. They are also likely to have a higher risk of suffering injuries in an accident and causing expensive damages.

Gender

Car insurance premiums in the United States depend on a variety of factors, including age and gender. Drivers can also expect to pay more if they live in a high-risk area or have a poor driving record.

The impact of gender on rates varies by state, with North Carolina having the smallest gap in the average cost of coverage for men and women. In Louisiana, male drivers pay an average of $404 more per year for coverage than their female counterparts.

Most states allow insurers to consider gender in calculating auto insurance rates, but a number of states have banned the practice. These are California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania.

According to a report from the Consumer Federation of America, gender is not an accurate predictor of risk and should not be a factor in auto insurance pricing.

It is also a factor that can lead to discrimination against some groups of consumers, such as those with a criminal record or those who are elderly.

In addition to age and gender, your driving record, credit score, claim history and the type of coverage you choose can also have a significant impact on your premium. You should shop around for car insurance at least once every two years to find the best deal.

Driving record

In the United States, the driving record of a person is one of the most significant factors that can influence his or her car insurance premiums. This is because insurers base their policies on your history of moving traffic violations and at-fault accidents.

Getting tickets for minor violations, such as speeding, disobeying a traffic signal or running a red light, can lead to higher rates. However, the amount that your rate increases after a violation varies from state to state.

A recent report from The Zebra shows that the severity of a violation affects how much your rates rise. For instance, in California, a violation that is worth one point can result in an 18.9% rate increase. On the other hand, in Florida, a violation that is worth four points can result in a 44.5% increase.

The length of time that a driving violation stays on your record can also influence your car insurance rates. Generally, moving violations stay on your record for an average of three years.

Keeping your driving record clean can help you lower your rates. It may take some time, but the more you drive safely and responsibly, the lower your rate will be.

You can try to improve your record by practicing safe driving habits, avoiding traffic violations and even taking a defensive driving course.

Vehicle type

The vehicle type you drive, including whether it's a sedan, wagon or SUV, plays a big role in how much your car insurance premium will cost. Insurers look at the safety record of the car, how often it's stolen or vandalized and how expensive it is to repair if damaged in an accident.

Insurers also look at the age and experience of drivers to see if they're likely to get into accidents or file claims. Younger and inexperienced drivers tend to pay more for car insurance than more experienced ones because they pose a greater risk.

Similarly, drivers who are married will typically pay less for insurance than single or unmarried drivers because they're less likely to file claims. Moreover, drivers who live in high-risk ZIP codes can expect to pay more for their insurance than people living in low-risk neighborhoods.

According to research conducted by the Consumer Federation of America (CFA), a person's home ZIP code is another major factor in their car insurance rates. CFA tested prices in ten cities and found that drivers living in higher-priced areas of each city often paid significantly more for their auto insurance than those in lower-priced areas.

Over the past decade, CFA has released several reports that demonstrate how socio-economic factors used by insurers push up premiums for lower-income Americans with clean driving records. These factors are often unrelated to driving safety but have a significant impact on the price of car insurance for those with modest means.

Add-ons

Car insurance add-ons are optional coverages that can help you reduce your out-of-pocket expenses if you get into an accident or suffer a mechanical breakdown. They can also provide peace of mind.

Standard car insurance policies cover liability, property damage and comprehensive losses, but some drivers might need additional protection from unforeseen events. Some examples of add-ons are gap insurance, rental reimbursement and roadside assistance.

Gap insurance pays to cover the difference between what your vehicle is worth and the amount of its insurance policy. The amount of this coverage varies by insurer and depends on the age and model of your vehicle.

Roadside assistance covers emergency services when you need towing, fuel delivery or a battery jump start. It can also include on-site repair, lockout service and more for a relatively low monthly cost.

Custom parts and equipment coverage: If you customize your car with an expensive sound system or paint job, a policy without this type of add-on might not cover the costs. It can cost a lot of money to replace a vehicle that’s customized, so this option is worthwhile for many people.

Vanishing deductible: This add-on helps you save money on your insurance by gradually reducing your deductible as you make no claims. This can be especially helpful if you’re driving an older vehicle with a high deductible and want to save money.

Some add-ons aren’t as useful as others, and they can be expensive to buy. So it’s important to assess the potential benefits and risks of each one.

Credit score

Credit scores can make a significant difference in the cost of car insurance. In fact, a recent report showed that drivers with poor credit can see an average of $784 increase in their annual premium.

Your credit score is a numerical rating that summarizes information on your credit reports, including how you manage your credit and your payment history.

It helps creditors decide whether to grant you credit, what terms they offer and how much interest you pay.

It is based on the information in your credit reports from the three major credit bureaus-- Equifax, TransUnion and Experian. The credit bureaus collect that information from lenders, such as your mortgage lender or your utility company.

The score is a number between 300 and 850. It shows lenders how likely you are to repay your debt and pay your bills on time.

You can access your free credit scores online through a variety of services. Some of these services offer a version of your FICO(r) Score, while others provide VantageScore(r) credit scores that are derived from data from a single bureau.

Keeping track of your credit score is important, because it can help you identify areas where you may need to make changes to your financial habits. Taking steps to improve your score can increase your chances of qualifying for favorable terms--and save you thousands in interest over the life of a loan.