Without a doubt, a car insurance is an additional expense that you need to budget every year. But before you complain about the costs, insuring your car is actually a good idea, especially when you have just bought it. Apparently, an auto insurance protects you from the losses incurred if you get into vehicular accidents or an unexpected car damage.
This type of insurance is paid through yearly contributions, and you have to pay it directly to your auto insurance company. If for instance, you get into a car collision, the company will take care of the expenses caused by the accident. You don’t have to pay for any out-of-pocket costs. With all that said, how much do you have to spend for an auto insurance these days?
Average Cost of Car Insurance
According to the January 2016 report from the National Association of Insurance Commissioners (NAIC) January via ValuePenguin, the latest average cost of car insurance on a yearly basis is $841.23, which is based on three coverages: Liability, Collision, and Comprehensive. This accounts for an estimated car insurance cost per month of $70.10. The state with the highest expenditure is New Jersey with $1,254.10, while the lowest is Iowa with $572.14.
The city with the most expensive car insurance price, as calculated and provided by NerdWallet, is Detroit with an average cost of $10,723. It is followed by New Orleans, Grand Rapids, Newark, Baton Rouge, Hialeah, Jersey City, Louisville, Miami, and then Philadelphia at the tenth spot.
Meanwhile, the city with the cheapest car insurance cost is Winston-Salem with an average price of $969. It is followed by Greensboro, Raleigh, Durham, Charlotte, Boise, Rochester, Fayetteville, Spokane, then Montgomery taking the tenth place.
Factors Affecting the Car Insurance Cost
There are many factors that affect the cost of a car insurance. According to NAIC, the per capita income, traffic density, and the current population significantly influence the insurance rates. In addition to such large-scale factors, the auto insurance costs will also vary in terms of auto repair fees, requirements for liability coverage, the rate of theft cases, as well as tort liabilities and other laws related to vehicles, to name a few.
But to keep it simple, here are the most common considerations that most auto insurance companies use to evaluate the price suited for your car. You can control some of these factors, while others are out of your hand.
- Your Current Location
If you take a look at the aforementioned figures, you would actually see a big insurance cost difference in every state, hence, your location is going to play a big role in the price of your auto insurance plans. Moreover, people living in states where cases of car theft are prevalent have a higher comprehensive coverage.
- Weather
This is an uncontrollable factor, but rates usually go up in areas where winter storms and other natural calamities cause liability claims.
- Vehicle Make and Model
Evidently, the more recent your car’s make and model are, the higher the car insurance rate you have to pay. The prices go up when you purchase more coverage for collision and comprehensive claims.
- State Requirements
Almost all states require vehicle owners to have a car insurance, but the minimum rate requirement varies from state to state. Apparently, there are some states that only require insurances for property damage liability and physical injuries.
- Personal Profile
Oftentimes, insurance companies look your personal profile in determining the price of your car insurance. The necessary profile data includes your age, gender, and marital status.