Auto insurance premiums cost an average of $ 99 per month, according to the most recent data from the National Association of Insurance Commissioners (NAIC). But depending on your coverage, the type of car you own, how long you’ve been driving, where you live, and other factors, that price can vary widely.
Prices can also vary widely from company to company, which is why it is so important to research the best car insurance deal before committing to an insurer.
Read on to find out why auto insurance rates differ so much, and how shopping around can guarantee you a more competitive rate. You can compare quotes from multiple auto insurers at once on Credible.
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Auto insurance discounts vary by insurer
Insurance companies offer discounts to drivers who meet certain criteria, and some companies may offer discounts more suited to your needs. These discounts can typically save you between 15-20% on the cost of your policy, which can lead to significant savings over time.
Here are some of the most common types of discounts:
- Discounts for Safe Drivers: You have a good driving record if you haven’t been in an accident in the past three or five years. Some insurers offer additional discounts to drivers who take defensive driving courses.
- Student discounts: Insurers generally offer a discount to students.
- Discounts on safety equipment: Examples include air bags, anti-lock brakes, anti-theft systems, and daytime running lights.
- Multi-vehicle discounts: This is a type of loyalty discount that helps families save on a policy with multiple cars.
- Discounts for military and federal employees: Many insurers offer discounts to military and other government officials, and some insurers serve these drivers exclusively.
- Group discounts: Buying your home and auto insurance from the same provider can save you up to 30% on the cost of your premiums.
Some insurers may offer larger discounts that are tailored to your needs. Find out what kind of auto insurance discounts you qualify for by shopping at Credible.
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Insurers weigh factors differently
It is well known that your driving history will affect the cost of auto insurance. A responsible accident can increase your insurance premium by 28%, according to PolicyGenius. High-risk motorist behaviors, such as impaired driving (DUI) or reckless driving, will further increase costs.
But your driving record isn’t the only factor that determines the cost of your policy. Insurers also take into account:
- Where you live
- How much you drive
- The type of car you insure
- Your age, your sex and even your marital status
- Your credit rating
- Whether you own or rent your home
Each auto insurance company rates these factors differently, so do your research before choosing an insurer. For example, some companies may offer a more competitive auto insurance rate for teenage drivers, while others are more forgiving of drivers with less than stellar driving records.
Finding each auto insurer can take time and effort, but there is a better way. You can compare the rates of multiple auto insurance policies within minutes on Credible.
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Auto insurance premiums tend to increase over time
The cost of auto insurance increased 47% between 2011 and 2021, according to the Bureau of Labor Statistics. Premiums are reset once every six months, which is usually when insurers will increase rates.
It pays to shop around and compare auto insurance quotes when your premium is about to expire. Ask your current insurer if your premium will increase when you renew, and use that information to see if you’re still getting a fair price for your auto insurance policy.
When it’s time to renew, you may also want to consider adding or removing certain coverages from your policy, such as property damage or collision coverage, uninsured motorist coverage, and personal injury protection. Full coverage policies tend to be more expensive, but they can save you money in the event of an accident.
If your policy is about to expire, make sure your new rate is competitive by comparing auto insurance policies on Credible. Obtaining a car insurance quote is free and will not affect your credit score.
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