Are You Paying High Rates For Car Insurance?


WRITTEN BY: Julia Matseikovich

UPDATED: NOVEMBER 03, 2022 | 1 MIN READ

If you believe you’re high rates for car insurance, you’re not alone. According to a recent Forbes Advisor survey of 2,000 drivers, 58% say they overpay for auto insurance. Many compared quotes from other companies, close to a third of which changed insurers. 

Many factors could explain your high rates if your auto insurance is too expensive. Review the average rates for car insurance, the possible components behind higher-than-average premiums, and what you can do to lower your bill.

Table Of Contents

Average Rates For Car Insurance

The average cost of car insurance in the United States is $1,553 per year for full coverage, according to U.S. News. Remember that this is only the average — premiums are based on many individual factors, so the actual cost will vary for everyone. 

How much does car insurance cost in my state?

Each state has different regulations, so where you live can have a big impact on your premium. Some states (and areas within each state) will also have varying auto insurance premiums due to legal requirements, weather, traffic congestion, and other factors. 

Per U.S. News, the three states with the cheapest auto insurance are Maine, New Hampshire, and Ohio. Michigan, Florida, and Louisiana are the most expensive states to insure a car.

Why Are My Rates For Car Insurance So High?

Insurance companies set your rate based on how likely they think you’ll file a claim and the cost. Simply put: if your insurer thinks you’re going to file a claim, your rates will increase.

There are many other contributors to high rates, but here are some of the most common reasons you may find yourself with a higher-than-average rate. 

Insurance company

Rates vary dramatically from company to company. So if you’re buying a policy from an expensive insurer, there’s a strong chance you’re paying too much. The only way to find the best price is to shop around and obtain quotes from multiple companies. 

Coverage options

The more auto insurance you purchase, the more you can expect to pay. Full coverage policies and plans that include high liability limits will be more expensive than others. You can lower your costs by requesting a higher deductible. Just make sure you have enough money set aside to cover a claim. 

Car

Insurance companies will consider your car when setting your rates. Because some cars are more likely to keep you protected in a collision, you’ll get lower rates for those cars. Generally, safer vehicles cost less to insure. Many people also wonder if their car color affects insurance rates, but in most cases, it doesn’t.

Location

States will have varying insurance rates, but where you live within each state will also affect your bill. For example, you’ll pay more if you live in an area with high theft. 

Age, gender, and marital status

Because younger drivers are statistically more likely to get into accidents, their rates are much higher than older drivers. Depending on the state, insurance companies are allowed to consider your gender, with women usually paying slightly less than men. Insurance companies may even consider your marital status, typically resulting in lower rates for married people.

Credit score

Drivers with poor or no credit are statistically more likely to file a claim than drivers with good credit. So your credit affects your car insurance rates. This results in higher-set rates for those that don’t have a strong credit history.

Driving record

After you receive a ticket, you can expect your premium to increase. Your insurer may deem you a high-risk driver, and the severity of your violation will impact how much your premium increases. 

What To Do If You’re Paying High Rates For Car Insurance

The fastest way to lower auto insurance premiums is to compare prices, take advantage of discounts, and adjust your coverage to fit your needs and budget. Additionally, young drivers can get less expensive by asking their parents to be added to their policy. 

How and when to compare quotes

Get multiple car insurance quotes each time you’re shopping around, and shop around at least once per year. You can shop for car insurance quotes at any time and even get same-day insurance if needed, but you’ll want to start shopping if you’ve experienced a life event, such as getting married or moving. 

Qualifying discounts

Many companies offer their policyholders a reduction of their premiums for fulfilling certain criteria. Check in with your insurance company to inquire about qualifying discounts such as driver behavior discounts, vehicle-based discounts, and policy discounts. 

Adjust your coverage

You can easily reduce your bill by adjusting your coverage, as long as you’re above the legal limit in your state. Remember that if you’re in an accident, you will be responsible for handling a claim over your policy limits.

Rates For Car Insurance FAQs

Do rates for car insurance go down after you pay off your car?

Paying off your car won’t reduce your insurance rates, but eliminating the extra bill will save you money and give you more control over your coverage. 

Do you get lower rates for car insurance if you pay in full?

Many insurance companies offer a discount for paying in full. When policyholders pay their premiums monthly, it costs more for the company to process those payments monthly to keep the policy active. 

How can I reduce my rates for car insurance?

There are many ways to reduce your rates for car insurance. For example, checking for qualifying discounts, maintaining a good driving record, and increasing your deductible are all solid ways to save. 

How do I know if I’m paying high rates for car insurance?

Check your state’s average auto insurance price and shop around for quotes. Consider other high-rate factors, including credit history, driving record, and location.

Did You Know, that Car Insurance Quotes Are Free?

Comparing the price of your current insurance policy to quotes from several other companies can keep your rates as low as possible. Even better, obtaining quotes s 100% free, so you have nothing to lose. Get multiple car insurance quotes now.