What Is the Average Cost of Car Insurance?

By Bill Herrfeldt

  • Overview

    According to the National Association of Insurance Commissioners in its 2006 report, the American consumer paid an average of $817 annually for his automobile coverage. However, that figure does not take into account the myriad ways that a person's automobile insurance can be affected. Where the car is located, previous accidents, age and gender of the primary driver and the amount of coverage that is either required by the state or requested by the driver affects how much the driver will pay for car insurance.
  • Features

    The cost of your automobile coverage will probably be affected by being involved in an automobile accident or if you receive a ticket for a moving violation. Also, your premium will vary depending on how you use your automobile. For example, if you use your car only for pleasure, your premium tends to be lower than if you drive your automobile to work. Also, the number of miles that you estimate driving each year will affect your premium because logic suggests that the more you drive, the more likely you will have a accident.
  • Geography

    What you will pay for automobile insurance depends on the state in which you live, because rates are regulated by state laws and the automobile insurance company must abide by them. For example, drivers in New Jersey paid close to $1,200 for a year's coverage, or over twice a much as those in North Dakota. New Jersey's rates are relatively high because population is much denser than in North Dakota, which is reflected by more accidents per capita.


  • Considerations

    Women under the age of 25 have fewer accidents, per capita, than do males of the same age. For that reason, automobile insurance purchased by males under 25 most likely will be higher than for females under 25. Also, there is a difference in rates based upon the type of automobile that you drive because a smaller, less powerful car will do less damage to another vehicle than one that is larger and has more power.
  • Identification

    There are 12 states and the District of Columbia that are considered "no-fault" areas. That means that a person will look to his own insurance company for payment, regardless of who is at fault for the accident. People living in these "no-fault" states tend to pay higher premiums for their automobile insurance than those who live elsewhere.
  • Warning

    Some people are "penny wise and pound foolish" when it comes to buying automobile coverage. In the interest of saving a few dollars, they buy insufficient insurance, the proof of which they will realize when they are involved in an accident. It is far better to pay a bit more for coverage that you know will be sufficient, based on your own personal circumstances.
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