You may feel you pay a lot for auto insurance. But you can only know for sure when you compare it to average premiums and how much other drivers with similar particulars pay. How much your friends, colleagues, people in your age or policyholders in your state pay in average? These are not difficult figures to find and use as benchmark. Only after knowing what others pay you can answer the question of how much do you pay for car insurance? Only then you can say your premium is too expensive or fairly cheap.
There are many ways of checking what you pay for auto insurance premium is fair or not. There is a high chance you can save hundreds, if not thousands, of dollars if you spare a little time to look into it.
How Much Should I Pay for Car Insurance?
People start with similar questions that suggest they are looking to find what is fair. The insurer has to charge a decent premium to make it work so that they can pay for the claims, their overheads and of course keep their shareholders happy. And you don’t definitely want to be taken for a fool by paying several times over the amount you should be paying.
One way of knowing what a fair premium would be for someone like you is to get a few quotes and see where most of the quotes end up. You can start getting quotes right here by entering your zip code above. If you get several quotes you will see how wide the premium gap can be between the most expensive and cheapest quote.
The other way is to figure out how much premium you should pay by looking at readily available data. Luckily, we have already done extensive work on this in order to help motorists determine if they are paying fair premiums. First of all, you can check how your age affects your rates by checking average car insurance rates by age. Age is a very telling factor especially in the early years of driving life. If you are a teenager you shouldn’t be comparing your premium with a middle age driver. Actually, you should be expecting to pay around 3 times more than a middle age driver. It is important to compare your rates with people in the similar age group.
Once you know how much your age affects your rates the next thing you may want to establish is how much is car insurance in your state for an average driver. It is granted that your driving record, type of vehicle you want to insure, your credit score and coverage you prefer will affect your costs. But, the average cost of vehicle insurance in your state is a good starting point. The good thing is that we have already separated the average costs for full and liability only coverage in that post to help make a better comparison.
Average premium expenditure in the US is $841 according to NAIC. According to our calculations, average premium for liability only car insurance is $684. And average premium for full coverage auto insurance is $1,325, according to insure.com.
So how much do you pay for auto insurance and is it fair? No doubt each insurer is different and the type of policy coverage they offer may be different too. Certainly, insurance isn’t a commodity where prices are easily comparable. Nonetheless, it isn’t hard to know when your insurer isn’t being fair with you and charging you more than most other insurers would do.
You should know in no uncertain terms that you can end up paying 4 or 5 times more for auto insurance if you take the first quote offered to you and that comes from one of the most expensive insurers.
Before you start calling it outrages you should know that you don’t have to accept any quote offered to you. And if you do accept the first quote you receive, you only have yourself to blame. Insurers are free to charge whatever premium they like within state insurance regulations. And you are free to go with whichever insurer you like.
How to Know What You Pay for Auto Insurance Is Fair?
Although it is difficult to comment on individual premiums there are a few factors that can influence your premium positively or negatively. You should check below points first to determine if you should be paying high or low premium.
- Good drivers with no recent claims or traffic tickets get the best automobile insurance rates. They should get about 30 – 50% better rates than people with imperfect records.
- Find out how much does insurance go up after accident? In general, a recent accident claim can affect your rates 20 – 80% depending on where you live. In states like California where driving records are the main factors affecting your rates you could see large increases in your premium. You may see lower premium increases in states where credit checks are allowed and you have a good credit score.
- These days, other factors like credit score can be as important as driving history. So, recent drop in your credit score can affect your rates more than you expect.
- Another thing to find out is how much does insurance go up after a ticket? Several tickets are obviously a worry but one DUI can be seriously detrimental to your premium.
- The type of vehicle you want to insure can affect your rates a lot. If it is a normal run of the mill sedan you probably don’t need to pay particularly expensive premium. On the other hand, sports type cars can trigger enough alarms with some insurers to double their quotes.
- The policyholder is always the main driver they look at but it isn’t the only driver that is priced for. Having a teenager or a high risk driver in your household can influence your auto insurance costs substantially.
- Living in a high risk zip code like a city center or high crime neighborhood can influence your rates a lot in comparison to a nice township.
- Things like being married and owning your home usually affect your rates positively and therefore you should be paying less than someone who is single and renting.
- If you seem to be struggling to get affordable auto insurance right now you should know that this can change if you can manage to stay away from above troubles only few short months. So, current high premiums can be temporary.
- Finally, shopping for car insurance is one of the best ways of reducing your premium. People who shop around can pay only fraction of the premium someone who never shops pays.
The bottom line is that you shouldn’t be naïve to think that most insurers would offer similar rates. It isn’t the case as every company is different in many ways including price. And you can save money on car insurance by getting alternative quotes.