Three Variables that Determine Average Cost of Auto Insurance

Are you afraid that you are overcharged? Well, almost all drivers think that their auto insurance is too expensive. No wonder that they ask question related to the average cost of auto insurance.

Each insurance company has its own variables and calculator to determine your insurance rates. That’s why each of you is charged with different rates. The average cost, however, cannot be given with only amount without considering the main variable. This article tries to clarify how much the average of car insurance and where it comes from.

Three Variables that Determine Average Cost of Auto Insurance
Image :

Average Cost by States

Don’t think your state has nothing to do with the average cost. Each state has law about the minimum liability that each driver is required to carry. If you live in a state with high theft rate and high accident rate, the average cost will also be higher than states with opposite condition.

To say the specific amount, the average cost of auto insurance in 2014 according to a study that is commissioned by Quadrant Information Services is around $907.38 per year. Again, if you live in a state that has higher insurance average, your insurance cost is likely higher, too.

For instance, Rhode Island has $2,020 and Oklahoma has $1,568 in average. Many other states have higher insurance average than national average.

It means, you have more chances to be charger higher. Besides, Department of Insurance from all state show that the average cost keeps increasing from year to year and it happens in most states.

Average Cost by Age

Another variable that determines the average cost of your car insurance is your age. The younger you are, the higher insurance cost you will have.

That normally happens since younger drivers are notoriously careless with lack of experience. The highest average cost of auto insurance by age is 16-year-old drivers with $8,226 in average per year.

18-year-old drivers have $6,456. The cost keeps decreasing along with your older age. 21-year-old drivers have $3,620, a drastic reduction of insurance cost, that is followed by $2,374 (25 years old), $2,078 (30 years old), $2,028 (35 years old), and $1,973 (40 years old).

The lowest average happens to be 55-year-old driver with $1,855 in average. After you get older, your insurance cost slightly increases.

Average Cost by Gender

If we look at the insurance cost by gender, there is not specific reason for why males have slightly higher insurance rates than females.

The contrast is only around $12%, but young boy drivers in the age of 19 gets the highest average cost of auto insurance, $2,154, compared to females in the same age with $1,930 per year.

While they turn into 31 years old, the insurance cost is plummeting with only $833 for males and $831 for females. The reduction also happens when you turn into 43 years old. Males driver only have $747 and females get slightly higher with $752 per year.

What Implies?

Either you are charge higher or lower that the average cost of auto insurance per year, it depends on several factors. The external factors include the car theft rate and accidents rate in your city. So, if you want to get lower cost, you may have to consider moving to a safer place to reside.

Then, from yourself, your driving history and tickets play the most important role. Your age is fixed price, but driving safely and avoiding car accidents for at least three years will prove that you are safe driver.

It means that auto insurance cost is subject to change. It depends on you as the driver whether you can control the variables or not since based on those variables, the insurance companies determine the insurance rate. If you can get lower average cost of auto insurance, more money can be saved.