Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 29, 2020

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Here's what you need to know...

  • Insurance companies consider the possibilities of having to pay for insurance claims
  • Examine the quotations you receive to make sure they contain the insurance coverage you intend to purchase
  • Each state has its own laws with regard to required limits of insurance

Car insurance premiums vary from state to state depending on a number of factors. Automobile insurance is controlled by each state rather than by the Federal government.

State legislatures approve rates and licensing of auto insurance companies depending upon statistics collected from the particular state’s statistical information.

Average expenditures for automobile insurance have been researched by the Insurance Information Institute.

Here are the averages listed from 2003 to 2012:

  • 2003 – $830 Average
  • 2004 – $843 Average
  • 2005 – $832 Average
  • 2006 – $818 Average
  • 2007 – $799 Average
  • 2008 – $791 Average
  • 2010 – $798 Average
  • 2011 – $792 Average
  • 2012 – $815 Average

New Jersey had the highest average rate during this period. New Jersey drivers paid $1,219.83 on average for one vehicle for the highest rate. Idaho came in with the least amount paid with $534.56 annual premiums.

In 2014, Michigan’s drivers paid the highest amount for car insurance and Ohio moved into the least expensive state. Use our FREE quote tool to compare insurance rates today!

Table of Contents

Rates Vary From State to State

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Several things affect rates for automobile insurance within a state:

  • Number of urban areas within the state
  • Traffic conditions within the state
  • State insurance laws
  • Percentage of uninsured drivers on the road
  • Auto thefts
  • Number of competing car insurance companies

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Car Insurance Rates Vary from Person to Person and by Circumstance

When calculating rates, auto insurance companies consider the following factors:

  • Personal information – Age, Gender, your marital status
  • Local theft and crime rates and whether the location is urban or rural
  • Vehicle – Type, make, model, crash test results, and safety scores
  • Personal driving record and information of drivers: Accidents in which they were involved; Tickets received; Violations incurred.
  • Mileage each vehicle is driven annually
  • Credit score and history

Statistically, those who are likely to have claims pay higher rates than those who are less likely to have claimed.

Ways to Get Cheap Car Insurance

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There are ways of acquiring less expensive car insurance, but the most reliable are to obtain quotations from other insurance companies.

Insurance companies specialize in certain types of insurance and these companies can provide less expensive premiums in certain circumstances.

Here are the following approaches to consider:

  • Put at least two of your insurance policies with the same company for a discount. Home insurance and auto insurance work together well, and the premium discount can be as much as 20% on your premiums.
  • Look for age-based discounts. Drivers over 25 can often see a reduction of 20% of their previous premium. Statistically, drivers between 25 to 55 are safer drivers than those younger or older.
  • Insure all the vehicles you own with the same company for a discount.
  • Driver’s education and defensive driving discounts are available with most companies. These courses are offered by various organizations, including schools and may save up to 10% of your annual premium.
  • Good student discounts are available from most insurance companies if the student has a good GPA. This can apply to grade school, high school, and college students, so ask.
  • Research vehicles before purchasing them. An automobile with a good crash test and safety experience can be less expensive to insure. Vehicles are also rated on the possibility of theft. Examine that before purchasing the car.
  • Keep a good credit rating because it can affect your rates.
  • Increase deductibles on comprehensive and collision, but make certain you can afford the deductibles.
  • Ask the insurance company about little-known discounts to help reduce premiums. Examples of these might be: Occupational discounts – some companies give discounts for teachers or government workers; some school alumni associations earn discounts, and organizations such as AARP can earn credits.

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Acquire Quotes from Different Insurance Companies

This is the most effective method of saving money on car insurance. To acquire quotes, you will have to give information.

Here is the information you must give:

  • Name, date of birth, drivers license numbers, and addresses of all drivers
  • Year, make, model and VIN for all automobiles owned
  • Usage of each car, including annual mileage
  • Social security number as well as occupation for all drivers
  • Educational history for drivers – example: BA, MA, MS, etc.

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Limits of Liability and Physical Damage Coverage

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Each state has its own laws with regard to required limits of insurance. Each state has a section of the state government that oversees insurance rates, licensing, and consumer information with regard to insurance.

Search for your state’s governmental website and enter the term “insurance” within the search bar to locate this information.

Here are some of the insurance limits:

  • Bodily injury liability  $100,000 per person and $300,000 per accident. This covers your legal liability in an accident with another automobile in which someone is injured.
  • Property damage liability  $50,000 per accident for legal liability for property damage caused in an accident
  • Medical payments coverage  $5,000 for emergency treatment and transportation of you and your family if involved in an accident.
  • Underinsured/uninsured motorists’ coverage  $100,000 per person and $300,000 per accident if you are involved in an accident with an uninsured driver.

Liability coverage does not pay for damage to your own vehicle in an accident. You should purchase the following coverage to help defray the costs of damage to your own car.

The coverage listed for physical damage is:

  • Comprehensive coverage  Pays for wind, hail, fire, storm damage, vandalism, theft, and animal damage.
  • Collision coverage  Pays for colliding with another automobile or fixed object.

A deductible applies, usually, to physical damage coverage, but not for liability insurance.

Set your deductible at a point where it helps you reduce premiums, but does not cause you financial hardship.

Evaluate Insurance Companies

Examine the claims-settlement histories as well as the financial stability of the insurance companies from which you obtain quotes.

Here a few sources for more information:

Examine and Evaluate Quotes

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Examine the quotations you receive to make sure they contain the insurance coverage you intend to purchase.

Compare premiums and make sure that reductions in premiums are not due to changes in coverage.

Look at the insurance companies from which you are asking quotations to make sure that you feel they are trustworthy. Keep in mind that you are ultimately responsible for the insurance you purchase.

Start comparing car insurance rates now! Enter your zip code below to get started!

References:

  1. http://www.aarp.org/
  2. https://www.statefarm.com/insurance/auto/coverage-options/liability-coverage
  3. https://www.progressive.com/auto/insurance-deductibles/
  4. http://www.naic.org/cis/
  5. http://www.ambest.com
  6. http://www.standardandpoors.com