Car insurance is one of those products that can at times seem so unnecessarily complicated. We get it that there are different levels of protection but why are quotes so different between providers?
Car insurance is, in fact, a regulated industry, but it sure doesn’t feel that way at times. So, how much is car insurance per month anyway?
Similar to other insurance products, car insurance has a pricing structure based on risk.
Providers use variables such as your age and gender, where you live, how much you drive, your car’s age, make, and model, and more, to calculate risk and determine premiums.
In other words, there isn’t an easy answer to how much is car insurance per month, because the number of variables in play is many.
That said, there are a number of sources you can use to benchmark average costs based on your profile. Doing research like we have done here for you is an essential part of choosing the right car insurance provider – as is learning about what goes into increasing or lowering your rates.
Also, we cannot stress enough just how important it is to shop around for car insurance and get quotes from at least three of the most trustworthy and reliable car insurance companies.
Here at Huntley Wealth Insurance Services, we live and breathe insurance. We always want to share what we have learned with you. So, let’s get started on understanding how much car insurance is per month, anyways!
How Much is Car Insurance in 2019
The National Association of Insurance Commissioners (NAIC), one of the most reliable and trustworthy sources for information on car insurance in the U.S, reported on the average cost of car insurance for the years 2011 through 2015, providing you with the most up-to-date average costs for 2011 to 2015:
|Average Cost of Car Insurance in 2011||$ 908.43|
|Average Cost of Car Insurance in 2012||$ 924.45|
|Average Cost of Car Insurance in 2013||$ 950.92|
|Average Cost of Car Insurance in 2014||$ 981.77|
|Average Cost of Car Insurance in 2015||$1,009.38|
We hope the above averages give you some idea about how much car insurance is per month, but again rates can vary greatly by the state as well as by insurance carrier. Let’s now look at sample data by a few states.
Again, these are samples only and do not represent rates you may be quoted. Additionally, each state provides averages by participating insurance providers for certain driver profiles, which also differs by state.
Florida (Miami-Dade County)
Samples provided are from 20 or more participating insurance providers in the state of Florida, which has a state-mandated coverage of $10,000 Personal Injury Protection/$10,000 Property Damage or 10/10.
Single Female (age 25)
One car, one violation and one no-fault accident in the last three years, and drives 12,000 miles annually:
- State-Mandated: $576 (lowest), $4,866 (highest) $1,784 (average)
- Full: $2,442 (lowest), $9,035 (highest), $4,112 (average)
Married Couple with Young Drivers
Parents (50), son (20), daughter, (18); two cars, no violations or accidents for three years, drive for work/pleasure – 12,000 car one and 8,000 car two annually
- State-Mandated: $1,456 (lowest), $15,481 (highest), $3,122 (average)
- Full: $5,156 (lowest), $39,303 (highest), $7,772 (average)
Senior Married Couple
Male (70), Female (65), one car, no accidents of violation for the past three years, pleasure driving 6,000 annually
- State-Mandated: $281 (lowest), $4,387 (highest), $597 (average)
- Full: $1,062 (lowest), $8,069 (highest), $1,828 (average)
Texas (Harris County, Zip Code 77339)
Samples provided are from 56 or more participating insurance providers in the state of Texas, which has a state-mandated basic coverage of $30,000 bodily injury per person/$60,000 bodily injuries per accident/$25,000 property damage liability per accident or 30/60/25:
Single Female (25-64)
One car, one at-fault accident, good credit, 30/60/25 coverage limits
- State-Mandated Coverage: $379 (lowest), $4,100 (highest), $1,667 (average)
Married Male (25-64)
One car, no violations, good credit
- State-Mandated Coverage: $221 (lowest), $3,607 (highest), $1,125 (average)
California (Long Beach)
Samples provided are from more than 40 participating insurance providers in the state of California, with a state-mandated basic coverage of $15,000 bodily injury liability per person/$30,000 bodily injury liability per accident/$5,000 property damage liability per accident or 15/30/5.
Single Female (ages 25+)
Toyota Camry, 6 to 8 years licensed, 1 at-fault accident, drives 12,600 to 15,000 miles annually
- State-Mandated Coverage: $1,081 (lowest), $6,318 (highest), $1,618 (average)
Married Couple (ages 25+) with Young Driver (son)
Toyota Camry/Honda Pilot, 28 years/25 years/1 year licensed, no violations or accidents, drives 12,000 to 15,000 miles annually for work/pleasure
- State-Mandated Coverage: $3,548 (lowest), $14,224 (highest), $7,125 (average)
Married Senior Couple (ages 50+)
Mercedes-Benz C300/Toyota Camry, 40 plus years licensed, no violations or accidents, drive 7,000 miles annually for pleasure
- State-Mandated Coverage: $536 (lowest), $1,924 (highest), $1,132 (average)
Note: the NAIC, state-based insurance departments and your state’s DMV are reliable sources for car insurance information either for your local area, state, or nationwide.
What Factors Effect How Much My Car Insurance Costs?
Insurance providers use complex mathematical algorithms to determine risk and premiums.
Overall, rates can change frequently so it is recommended you check rates every six months if you are looking to lower your premiums.
Rates fluctuate based on external factors such as extreme weather, population density changes, car theft frequency, and more.
Let’s take a look at some key factors used by auto insurance providers.
- State Requirements: each state sets its own vehicle insurance requirements with most states requiring at least personal and property liability coverage. There are a few exceptions. Virginia allows a motorist to pay an uninsured motor vehicle fee of $500 for a 12-month driving period in lieu of purchasing insurance; Arizona requires a $40,000 cash bond; and, New Hampshire has no minimum auto insurance requirements, however, the state holds you responsible for paying all personal injury or property damage you cause in a traffic accident.
- Types and Amounts of Coverage Purchased: the more coverage you add to your policy, above the state’s mandated minimum coverage, you will pay more in premiums. Now that isn’t necessarily a bad thing especially if you have a newer vehicle, drive a lot of miles increasing your risk of accidents, or you have children.
- Underwriting and loss adjustment expense: if you have even one traffic violation against you, then underwriting can increase your rates.
- Driving locations: if you spend a lot of time driving on highways or in certain neighborhoods where traffic accidents frequency rates are higher, or the roads are not maintained, your rates will be higher.
- Traffic density: if you live in or commute to an urban area or drive on high-volume roadways, yep, your rates will be higher.
- Vehicle theft rates: car insurance companies look at vehicle theft frequency rates in neighborhoods, which can affect your rates.
- Population density: the more populated an area is, the more likely vehicle theft, vandalism, and traffic incidences may be, which ultimately impacts your premiums.
- Medical and legal costs: when you pay your premiums, that money is pooled together with other policyholders’ payments and is then used to cover future claims. If one policyholder in the pool causes an accident that injures another driver or passenger, which leads to major and ongoing medical care for that individual than your rates along with other policyholders in the pool could increase.
- Per capita disposable income: the first thing car insurance providers want to know about you is where you live. In other words, what’s your zip code. Rates can change more than 50% just by changing the zip code you provide. In more affluent neighborhoods, it is assumed that the per capita disposable income will be higher. This can actually decrease your rates.
Rates can also fluctuate based on changes to your personal information, including your age, credit score, marital status, place of residence, and more.
If you do have any personal changes that could improve your rate at any time during the year, be sure to contact your insurance agent right away.
Things, like getting married or turning 25 years of age, can greatly improve your insurance rates as long as your current driving record is clean.
How to Reduce the Cost of Car Insurance
While you’ll never be able to whittle down auto insurance costs to nothing, there are ways to reduce the costs of your car insurance premiums.
- Increase your deductible: on average, you can save about 10% by increasing your deductible by $500 if you have a clean driving record and are over 25 years of age. This option isn’t for everyone, however, and we only recommend it if you can cover the out-of-pocket expense if you get into an accident.
- Reduce optional insurance on older cars: this is the trade-off, right? You have to think about the value of your car versus how much would it cost to repair it. In other words, it is worth it?
- Identify cost-reducing safety features: buying a safe car can save you money on auto insurance. Items such as airbags, anti-lock brakes, electronic stability control can get you a discount on your premiums.
- Bundle insurances: this can save you overall on auto, homeowner’s, or renter’s rates.
- Understand available discounts: talk to your insurance agent about discounts such as low mileage, safe driving, and other discounts to help you save money on rates.
- Learn about student discounts: if you are a full-time student, high school or college, and maintains a B average or higher, you may be eligible for good student discounts.
What Can Increase the Cost of Your Car Insurance
We’ve mentioned some of these previously but here is a comprehensive list of what can increase the cost of your car insurance, listed in three categories: vehicles, drivers, and household.
- Make, model, and year
- Vehicle record (VIN), i.e., incidences of previous accidents, and more
- Safety features – airbags, anti-theft devices, etc.
- Miles driven annually
- Age – if under 25 years of age or 70 years or older, you will pay higher premiums
- Gender – males under the age of 25 pay higher premiums
- Safe driving or defensive driving training/course completed
- Number of drivers on your policy who live with you
- Good grades can get you a student discount
- Credit score of the policyholder(s)
- Insurance payment history of the policyholder(s)
Zip code – location, location, location!
- Parking – do you park your car in a garage or on the street?
- Budget – can you afford to increase your deductible?
The Bottom Line
It’s super hard to think about setting a monthly budget. We get it. It’s something we struggle as a nation to do, really. Few of us are saving money yet are living beyond our means.
How does this fit into how much is car insurance per month? Understanding how much money is coming in and going out each month can help you and may even give you a greater sense of peace of mind. And, don’t we all want that?
Some financial advisors recommend the 50/30/20 monthly budget rule:
- 50% on essential needs: things you need to live such as rent, food, gas for your car, and insurance
- 30% on wants: in other words, this is your fun money!
- 20% on savings and debt: saving for your future and paying off your past debt for the future!
Before you buy a vehicle or auto insurance, put together your monthly budget to see what you can afford. We all want to drive that brand, the new car right off the showroom floor but can we or should we really afford it?
And then, you have to consider paying more in car insurance on a new car versus a certified used one.
Ok, we did review a lot of information in this post. We hope we’ve provided you with some good insight into how much car insurance can cost per month.
There are so many variables that come into play, which can make the process of shopping for car insurance a frustrating experience.
We’re here to help. We did more than 2,000 hours of research on car insurance companies, so shop our list first of reputable companies, and we’re sure that you’ll find the absolute best car insurance coverage at the right price from a stand-up car insurance company.
*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.