Sunday Oct 17, 2021

Average Car Insurance Costs in 2021

Average Car Insurance Costs in 2021

Average Car Insurance Costs in 2021

Information about Average Car Insurance Costs in 2021

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The national average cost of car insurance is $1,592 per year, according to NerdWallet’s 2021 rate analysis.

That works out to an average car insurance rate of about $133 per month.

But that’s just for a good driver with good credit — rates vary widely depending on your history. National average car insurance rates are:

  • $1,592 for a good driver with good credit.

  • $2,439 after an at-fault wreck.

  • $2,812 for a good driver with poor credit.

These rates are for full coverage insurance, which includes liability, comprehensive, collision, uninsured/underinsured motorist protection and any additional state-mandated coverage. Unless otherwise stated, our sample drivers had a clean driving record and credit in the “good tier” as reported to the insurer.

For minimum required coverage, national average car insurance rates are:

  • $565 for a good driver with good credit.

  • $884 after an at-fault wreck.

  • $984 for a good driver with poor credit.

That’s about $47 per month for a 40-year-old driver with good credit and a clean driving record, ranging up to $96 per month for a driver with a recent DUI for minimum coverage car insurance.

But averages don’t say much about your own car insurance rates. A number of personal factors, both within and outside of your control, inch rates up or down until your price is totally personalized.

How much does car insurance cost in my state?

Where you live can have an enormous impact on auto insurance rates, because each state has different regulations for auto insurance. Average prices in the most expensive states are at least two times higher than those in the cheapest ones.

How much insurance you have matters, too: Full coverage car insurance is more than double the price of minimum coverage, on average, according to our analysis.

Here’s what our state-by-state analysis of 2021 car insurance rates shows for drivers with good credit and no recent accidents:

  • Maine is the cheapest state for full coverage car insurance with an annual average rate of $963, followed by Ohio and Idaho.

  • Louisiana is the most expensive state for full coverage auto insurance at $2,762 per year on average, followed by Michigan and Kentucky.

  • Iowa is the cheapest state for minimum required coverage, at an annual average car insurance rate of $255, followed by South Dakota and Idaho.

  • For minimum required coverage, Michigan is the most expensive state at $1,128 per year, on average, followed by New York and Louisiana.

Average car insurance costs for full and minimum coverage by state

Average car insurance costs by company

Every car insurance company sets rates based on dozens of factors, including your driving history, location, vehicle and demographics. They’re making an educated guess about how likely you are to file a claim in the future and setting your price accordingly.

Each insurer treats each factor differently. If you have poor credit, one insurer might charge you 10% more for the policy, while another would charge 40% more. A discount for being claim-free in recent years might earn you a 20% discount with one company and 5% at another.

All this results in very different rates from one person to the next. This is why the company that gives your friend super-low rates might not be the cheapest for you.

Average car insurance costs from large companies

*USAA is available only to active military, veterans and their families.

Bear in mind that state regulations heavily affect prices, and some of these companies are primarily available in “cheap” or “expensive” states for auto insurance. We can get rates from many of the largest carriers in a state, so many smaller insurers aren’t included due to a lack of pricing data.

Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our analysis because it does not provide rate data.

Average car insurance rates after an at-fault accident

After an accident, average auto insurance prices for an at-fault driver are:

  • $2,439 per year for full coverage.

  • $884 per year for minimum coverage.

On average, car insurance rates are 50% higher for a driver who has caused a wreck than for one who hasn’t.

How much an at-fault crash raises average car insurance costs

State to state, rate increases after an accident tend to stay in the 30% to 60% range, with notable exceptions in California, Massachusetts and North Carolina, where rates increase after an accident by more than 70%, on average. In California, that translates to an extra $1,049 a year in car insurance premiums.

How much your rates will rise also depends on the severity of damage and whether you have accident forgiveness on your policy or any “good driver” discounts you stand to lose. The hypothetical accident in our analysis was relatively minor, resulting in $10,000 worth of property damage and no injuries. Accidents resulting in medical costs can be very expensive and result in even steeper rate increases.

It’s important to shop for the cheapest insurer after an accident, because each company considers factors like a crash differently in setting prices. Our analysis found that American Family increases car insurance rates by about 11% on average after a wreck, while rates at The Hartford and 21st Century more than double.

Causing an accident can raise your auto insurance costs for three to five years afterward, depending on the carrier. This is why it’s wise to shop for car insurance quotes just after the third and fifth anniversary of your wreck to see if you can get a better deal.

Average car insurance costs for good and bad credit

Having bad credit has a surprisingly large impact on auto insurance rates in most states. On average, car insurance rates for drivers with poor credit are more than 75% higher than for people with good credit.

Average car insurance rates for a driver with poor credit are:

  • $2,812 per year for full coverage.

  • $984 per year for minimum coverage.

Average auto insurance rates for good and bad credit

Insurers use a “credit-based insurance score,” similar to a regular credit score, to help set rates in most states. The insurance score uses all the same factors as a regular credit score — things like on-time payments and delinquencies — but weighs them differently. Insurance companies point to data linking poor credit to more frequent insurance claims to justify the higher prices to state regulators.  California, Hawaii, Massachusetts, Michigan and Washington don’t allow insurers to use credit when determining car insurance rates.

The score’s impact on your premium depends on where you live and which car insurance company you choose.

In contrast, average rates more than double in nine states: Arizona, Connecticut, Maine, Michigan, New Hampshire, New Jersey, New York, South Carolina and Utah.

Some companies are more forgiving of bad credit than others, so it’s worthwhile to shop for quotes while you’re trying to build your credit. For example, here’s what we found for a 40-year-old buying full coverage:

  • The Hanover’s rates for a driver with bad credit in Connecticut, Maine, Michigan and New Hampshire are more than triple its rates for someone with good credit.

  • At the other extreme, National General’s rates in North Carolina are only $1 a month higher for a driver with poor credit than for one with good credit.

Average car insurance rates after a DUI

Getting caught drinking and driving will mean significantly higher prices for car insurance. On average, auto insurance rates go up about 87% for a driver with a recent DUI, NerdWallet’s analysis found.

For a 40-year-old driver, average car insurance rates after a DUI are:

  • $3,114 per year for full coverage.

  • $1,152 per year for minimum coverage.

How much a DUI raises average car insurance costs

Our analysis found an average increase of at least $500 a year for full coverage car insurance after a DUI in every state, and in California and Michigan, the average increase is more than $3,000 a year.

Shopping around for the cheapest car insurance after a DUI can lessen the blow. Among the largest companies in our analysis, average annual rates for full coverage car insurance after a DUI ranged from $809 at American National to $8,589 at Encompass, a difference of more than $7,780 a year between companies.

Switching to your state’s minimum required insurance coverage is another way to lower the cost. For minimum coverage, we found average annual rates ranging from $292 at American National to $4,248 at Auto Club Group, a AAA insurance carrier. However, if you have a loan on your car, or it’s leased, you may be required to keep collision and comprehensive coverage.

Average car insurance rates for young drivers

Insurers see less experienced drivers as a bigger risk and typically charge them heftier prices. Insurers may categorize young drivers as anyone 16 to 25 years old, or sometimes even anyone under 30 years old. For our analysis, we analyzed rates for 20- and 25-year-old drivers.

On average, car insurance rates are more than $1,700 a year higher for a 20-year-old driver than a 40-year-old, our analysis found. As you age, rates tend to go down. Rates are about $300 a year higher on average for a 25-year-old driver than a 40-year-old.

Average auto insurance costs for a 20-year-old driver

For a 20-year-old driver with good credit and a clean driving record, average car insurance rates are:

  • $3,331 for full coverage.

  • $1,198 for minimum required coverage.

But young drivers with blemished credit or a less-than-perfect driving history are likely to shell out more for car insurance.

Good driver with good credit

Average auto insurance costs for a 25-year-old driver

For a 25-year-old driver with good credit and a clean driving record, average car insurance rates are:

  • $2,799 for full coverage.

  • $1,010 for minimum required coverage.

Good driver with good credit

Average auto insurance costs for young drivers by company

Knowing average rates gives you an idea of what to expect, but it’s only a starting point for a young driver looking for affordable car insurance. Rates can vary by hundreds of dollars a year, depending on where you live and which insurer you choose. Here are average rates for the largest auto insurance companies (except Liberty Mutual, which we can’t get rates for) for 20- and 25-year-old drivers buying a policy with full coverage.

*USAA is available only to active military members, veterans and their families.

Average car insurance costs by gender

On average, car insurance costs differ little by gender compared with differences we see by company, state, credit score and driving history. That doesn’t mean that a cost difference due to your gender would be insignificant, only that it’s not a pricing factor well-illustrated by national statistics.

In states where the practice is allowed, we averaged rates for men and women separately and found that on average:

  • At age 25, men pay about $98 more than women per year.

  • At age 40, women pay about $4 more than men per year.

Average cost of car insurance by vehicle

In other analyses, we used a 3-year-old Toyota Camry (the most popular sedan in America by sales in recent years) to show how rates vary by personal history and demographics. But the make and model of your vehicle will certainly affect rates.

Insurers charge more to cover certain cars, including:

  • Sports cars, which have higher top speeds. People tend to drive them faster, increasing the likelihood of a wreck or traffic violation. If you get a speeding ticket, insurers think you’ll be more likely to cause an accident, which increases rates further.

  • Luxury cars because they tend to have expensive parts and details that are costlier to replace if damaged in a crash.

  • Electric vehicles, which have more expensive engine parts to replace, especially the batteries, which can cost thousands each.

  • Cars that are stolen often, which tend to have higher rates for comprehensive insurance, which pays out when your car is stolen or damaged by something non-traffic-related, such as floods, fire and vandalism. Comprehensive insurance is typically optional unless you have a loan or lease.

To see how rates differ depending on your vehicle, we looked at average car insurance rates for the 25 most popular vehicles based on sales in a separate analysis from 2021. As you can see below, the Camry is far from the cheapest model. That honor goes to the Subaru Outback for an average car insurance cost of $1,392 per year.

Average annual insurance premium

21. Chevrolet Silverado 1500

You can see that as you go down the list, the average price typically changes by only a few dollars per year, but between the Outback and the Nissan Altima, there’s an annual difference of $389, on average. That works out to about $32 per month, perhaps not enough to persuade someone with their heart set on an Altima to buy an Outback instead.

What other factors affect my car insurance cost?

  • More specific location data such as your ZIP code or city.

  • Your occupation, in many states.

  • Your previous insurance company. If it was a nonstandard insurer specializing in high-risk drivers, you might see higher insurance rates with some companies.

  • Continuous insurance coverage. Companies charge more for drivers with lapses in coverage.

  • Annual mileage driven per car.

  • Your marital status. Single people — even widows, widowers and divorced folks — tend to have higher insurance rates.

  • How much education you’ve completed.

  • Discounts you’re eligible for, which vary widely by company.

  • Whom you live with. Some companies won’t allow you to exclude people such as roommates or nondriving adults from your policy.

How to get cheap car insurance

By now you may have concluded that average car insurance costs have little to do with your own — this is true. No matter how many averages you look at, the same disclaimer holds true: “Your own rates will be different.”

But you can still find the best cheap insurance for you by shopping around for rates every year and every time something major happens in your life, including marriage, a new job, moving or buying a new car. Additionally, if you’ve had a recent at-fault accident, DUI or other traffic violation, be sure to shop in the month after the third and fifth anniversaries of the incident.

If you’re ready to shop, you can check out the cheapest companies in your own state for several driver profiles.

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