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How Much Does Car Insurance Cost?

It is not uncommon to find people wondering “how much does car insurance cost?”  these days especially by those who are planning on buying it. There are plenty who think that their premiums are through the moon, and it’s seemingly impossible to calculate premiums yourself, so it’s hard to know why you’re even being rated this way and for what and why the insurer assigns that price to it.

the cost of car insurance

The Cost Of Auto Insurance – A Guide From forautoinsurancequotes.com (image source FLICKR)

One of the more transparent factors in calculating insurance premiums has to do with location, location, location. If you can’t figure out how your age or car or driving history is affecting rates, take a look at where you live: it may be playing a bigger part than you think. Auto insurance premiums take into account many factors including the greater likelihood of having an accident in a city where there is more traffic, the cost of court settlements in a state, the cost of medical treatment, and various other factors. There are areas within cities where there is more auto thefts and vandalism, and these concerns are factored into the auto insurance premiums calculations.

The Cost Of Car Insurance Varies From Place To Place

If you think your auto insurance premiums are high, compare them to the top 10 most expensive insurance premiums in the USA as of March 2011.

At number one is Michigan, where the average cost of auto insurance per year is $2,541, followed by Louisiana with $2,453, then Oklahoma $2,197, Montana $2,190, Washington D.C. $2,146, California $1,991, Mississippi and New Mexico tie for seventh place with premiums of $1896, then come Arkansas, $1,836 and Maryland $1,807.

These are average figures, of course, and if you live in an urban area, then premiums will be above these average figures. It is unusual not to see Florida in the top 10 as coverage is high in that state because of the threat posed by hurricanes and the fact that the state requires motorists to be protected against accidents that could occur with uninsured motorists. Medical payments also figure in the reason why Florida motorist’s premiums are high.

In Maine people tend to pay the lowest auto insurance premiums, and this is because the state is not as densely populated as others, and because fewer accidents occur which involve insurance payouts. It would seem that the people of Maine would prefer to settle disputes out of court and without claiming from their auto insurance companies.

Michigan is the number one state in the highest auto insurance premiums stakes because the state’s laws will pay unlimited medical benefits for the lifespan of accident victims. The auto insurance companies pay $460,000 benefits and after that, a state wide pool, managed by its Catastrophic Claims Association, pays the rest of the benefits. This affects the auto insurance premiums of every driver in the state of Michigan.

Unfortunately Michigan has one of the highest unemployment rates in the USA with 15% registered as unemployed. This means that many drivers cannot afford to pay the high auto insurance premiums and so drive illegally without insurance, which means that other motorists need to take out coverage for the possible occurrence of accidents with an uninsured motorist. Residents in Detroit are paying some of the highest auto insurance premiums in the States which again increases the average paid by Michigan residents.

So what if you’re in Washington D.C. , not an ‘official’ state where many people commute into for work? DC is a good example of how a city can further play into the location location location factor, and here’s why. In the top ten for the highest auto insurance premiums not only because it is a large conurbation so the risk of having an accident is high, but because its residents tend to have expensive vehicles, and the more expensive they are the more expensive they are to insure. As in all the more affluent state the residents of D.C. are more likely to buy new vehicles sooner than people who live in states that are not so wealthy. It could be argued that such people don’t mind paying higher auto insurance premiums as they earn more than most. However Mississippi motorists have to pay high auto insurance premiums, despite the fact that the average earnings per capita are $31, 186 a year, which is 25% lower than the national average. This is partly because of the number of uninsured drivers in the state, who have to choose between driving to work or walking with the alternative being not having a job because of the cost of travel.

Ways To Lower Your Car Insurance Costs

However there are ways of getting lower auto insurance premiums. For example if your vehicle has safety features such as air bags, and an alarm system along with an ABS braking system, you can get lower premiums. As different models in the same range of vehicle also have different premiums, then if you are purchasing a new vehicle it is worth consulting your insurance agent before buying a new vehicle so that you can find out which model in the range has the cheapest auto insurance premiums. If you have a clean driving record, then your premiums will be lower than someone who has had accidents and been convicted of traffic violations.

The answer to your question, “How much does car insurance cost?” can vary depending on the insurance company that you will be dealing with. Each insurance company has its own criteria on where their clients will fall under based on their driving history, type of vehicle, and marital status among others. If you are aiming for cheaper auto insurance increasing your vehicle’s safety features as well as improving your driving abilities can help increase your chances of getting discounts in the long run.

How much does car insurance cost? Depending on where you live and whatever criteria you fall into, it can be quite cheap or it can be quite expensive. You just need to spend some time looking for the right kind of auto insurance for you and the budget that you have at the moment.

There are cheaper options online, but remember to scrutinize the fine print before signing a contract.

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