Why is car insurance more expensive for me?
Your car insurance may be expensive because of your driving history, location, vehicle or credit history. Recent insurance claims and violations can increase your rates for three to five years. On the other hand, it's possible you also just have a more expensive car insurance company.
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
On average, drivers with poor credit pay 118 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
There are more crashes that are more severe
And that's pushing up insurance rates to cover the costs of repairs and health care for those injured in crashes. Nearly 41,000 people died in US traffic crashes last year, up 13% from 2019, according to the National Highway Traffic Safety Administration.
"Between 2020 and 2024, inflation increased the cost of vehicle parts and labor, car crash fatalities increased by over 10% and we saw a significant rise in extreme weather and vehicle theft claims. All these factors contribute to the high rates we're seeing today."
The average cost of full-coverage insurance is $2,008 per year or $167 per month, while minimum-liability coverage averages $627 per year or $52 per month. However, what you pay for auto insurance coverage varies based on your personal rating factors.
Inflation and economic factors
Increased car repair expenses for parts and labor and higher replacement costs can lead to insurance rate hikes.
Generally, the more time and miles you put on your vehicle, the higher the chance you may be involved in an accident. Other items that may be considered include how long you have been driving, your driving record, and your claims history.
Men pay more for auto insurance on average because they're statistically more likely to get into accidents and to have major injuries. However, male drivers only pay about $51 more per year than their female counterparts on average.
What is a good car insurance score?
Insurance scores range between a low of 200 and a high of 997. Insurance scores of 770 or higher are favorable, and scores of 500 or below are poor. Although rare, there are a few people who have perfect insurance scores. Scores are not permanent and can be affected by different factors.
Key Things to Know About Auto Insurance Scores
A good insurance score is roughly 700 or higher, though it differs by company. You can improve your auto insurance score by checking your credit reports for errors, managing credit responsibly, and building a long credit history.
By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.
Auto insurance premiums are determined by factors you can control — such as where you live, the type of car you drive and how much coverage you buy — and those you can't, such as your age or inflation. Poor credit can significantly raise your rates in many states, as can accidents or DUI violations.
Your age – In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. Insurers generally charge more if teenagers or young people below age 25 drive your car.
Car insurance costs have been on the rise, leaving drivers searching for ways to save on car ownership costs. In fact, according to a report from Bankrate, the average annual premium of full coverage auto insurance rose to $2,543 in 2024 — up 26% from the previous year.
If you're wondering why your car insurance went up, you aren't alone. One of the most common reasons is simply because your insurer increased its rates. Whether to account for inflation, recoup funds after a natural disaster or cover higher claims, many insurance companies increased rates in 2022.
Rates commonly rise after auto accidents or traffic violations. Premiums can also increase due to life changes like moving or marital status shifts. Factors both within and outside your control can influence your rates.
Rate level increases often come about because of trends in the industry towards more expensive vehicle repair and medical costs. Repairs and medical costs are almost always on the rise, so overall rate decreases are a very rare occurrence.
If paid on a monthly basis, $200 is a lot to pay for car insurance.
Is $100 a month expensive for car insurance?
Our cost estimates show that 35-year-old married drivers with good credit and clean driving records pay an average of $144 per month for car insurance. Paying around $100 per month for quality auto coverage is a good deal.
Cheap car insurance. State Farm is the cheapest large auto insurance company in the nation for good drivers, according to NerdWallet's 2024 analysis of minimum coverage rates. State Farm's average annual rate was $471 or about $39 per month.
If your car insurance rate goes up, it could be because of factors beyond your control — e.g., inflation, age, gender, etc. However, there are ways you can lower your premium by yourself, such as improving your credit score, being a good driver, and driving less.
Geico is cheap because it offers a wide range of discounts that apply to a variety of situations. Geico also covers millions of drivers across the country, so it spreads out financial risk, which helps it offer cheap car insurance quotes.
“It might feel random, but insurance companies may increase prices for inflation adjustments, or if the company as a whole is seeing higher claims rates than they expected across all drivers,” says Nestor Hugo Solari, cofounder and CEO of Sigo Seguros, an insurance technology company providing affordable access to car ...
