What affects car insurance rates?

Two drivers with the same car can pay very different amounts for the same coverage. Insurers price risk, meaning the likelihood and likely cost of a future claim, and each company weighs the evidence in its own way. No single formula applies everywhere, but the factors below come up again and again.

Where you live

Location can matter before anything about you as a driver. State rules on required coverage, repair and medical costs, lawsuit patterns, weather and vehicle theft all feed into prices. In the averages we track, full coverage runs from about $85 a month in New Hampshire to about $301 in Maryland. Prices can also differ within a state, because many insurers consider your ZIP code. You can see every figure in our table of average costs by state.

Age and driving experience

Teen drivers are usually priced highest, because inexperienced drivers have higher crash rates as a group. Prices commonly fall through the twenties, level off in middle age and may rise again for older drivers. A few states limit how age can be used, so this pattern is not universal.

Driving record

Recent at-fault accidents, tickets and impaired-driving convictions usually raise premiums. The size of the increase depends on how serious the incident was, how recent it was and how far back a given insurer looks, often around three to five years. A DUI can also bring extra requirements, such as a state financial responsibility filing, and some insurers may decline to cover the driver at all.

Credit-based insurance scores

In many states, insurers may use a credit-based insurance score, which is related to but different from the score a lender sees. The practice is debated, and rules vary. California, Hawaii and Massachusetts restrict or ban it for car insurance, and other states set limits of their own. Your state insurance department can tell you what applies where you live.

The vehicle you drive

Repair costs, safety performance, theft rates and engine power all play a part. Sports cars and luxury models tend to cost more to insure. Electric vehicles can too, partly because some repairs are expensive, though the result depends heavily on the model. Before you buy a car, it can be worth asking an insurer how that specific model would be priced.

How much you drive

More time on the road generally means more exposure to crashes. Long commutes and business use may raise a premium, while low annual mileage may lower it. Some insurers check mileage through odometer readings or a tracking app, and others simply ask.

The coverage you choose

Higher liability limits and lower deductibles cost more, while optional extras add to the total. The largest choice is often whether to carry collision and comprehensive coverage at all, which we explain in full coverage vs liability only.

Other factors you may run into

Insurers may also look at your claims history, any gap in prior coverage, marital status, gender and whether you own your home. Not every insurer uses all of these, and some states prohibit certain ones. Discounts then adjust the price further, and the discounts on offer differ from company to company.

See how the factors combine

Because the factors multiply rather than simply add up, a young driver with a recent accident can see a much higher price than either fact alone would suggest. Our free estimate calculator shows that effect using simplified, illustrative multipliers. They are not any insurer's filed rates, so treat the output as a rough estimate. When you are ready to act on what you have learned, read how to lower your premium and how to compare quotes properly.