A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 15, 2021

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The company that produces the cheapest car to insure is Toyota, according to Motor Trend. The 2012 Toyota Sienna costs approximately $1,177 per year. This is $83 less than the Dodge Caravan and $113 less than the Chrysler Town & Country.

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One of the reasons the Toyota Sienna has such a low annual car insurance rate is because of the low maintenance, exceptional safety features and high rating received by J.D. Power. While the 2012 ratings are not available for review, the 2011 Toyota Sienna received three out of five stars in overall customer satisfaction.

Of course, there are other reasons why some vehicles cost more to insure than others are, however on average, the auto insurance providers generally take the specifications of each vehicle into consideration and create a model that calculates their rates. From there, the amount you might be expected to pay may vary depending on other areas.

Factors That Determine Insurance Rates

Age – It is no secret that car insurance for young, inexperienced drivers is more expensive because of the risk factor. It is highly likely that teenagers and young adults will make some common mistakes while they learn the rules of the road. Because of this, most car insurance companies will charge more for drivers between the ages of 17 and 25.

Driving History – Multiple accidents, moving violations, and other negative marks on your driver’s license may cause you to shell out more each year to your car insurance provider. There are ways to reduce your annual premium, like taking defensive driver courses, but this will take time.

Credit History – Many car insurance providers are now considering the creditworthiness of a prospective buyer as a way to judge responsibility. If you have less than stellar credit, you may find yourself receiving a higher premium than someone with excellent credit.

Location – Where you reside plays an important role in your car insurance costs. For example, people who reside in rural areas sometimes receive much lower quotes than those who reside in large cities.

Gaps in auto insurance – If you have had gaps in your auto insurance of more than six months, this can cause a red flag for many providers. In fact, most states will notify the Department of Motor Vehicles after your insurance has lapsed past 60 days. Should this occur, your driving privileges are compromised and this negatively affects your history.

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Different Levels of Car Insurance

The most common level of car insurance is liability insurance and covers the owner of the automobile in the event of an accident that causes a certain level of damage. It protects against personal injury, damage to the vehicle or property. The amounts are generally low and dictated by your state. This is why most drivers elect other levels of insurance to compensate for the amount provided.

There are two types of coverage, Bodily Injury and Property Damage. The first provides for medical costs and loss of time from work. The second pays for damage to property.

If you are faced with legal issues, the liability coverage will also take care of your attorney and court fees. All 50 states in the U.S. require a minimum level of liability insurance to operate a motor vehicle.

The next type of auto insurance is called Personal Injury Protection, or PIP. This type of coverage pays for any medical related expenses that the standard liability insurance does not cover. This includes physical therapy, rehabilitation, and even funeral costs if necessary.

Collision insurance provides coverage if you have damaged a vehicle, an object or suffer a serious crash. Comprehensive insurance is another level of protection that covers non-collision based damage. For example, if your car is involved in a fire or hailstorm, this level of insurance will pay to repair the damage. It also covers theft and vandalism.

Determining the Correct Amount of Car Insurance

First, you should check with your state to determine the minimum level of insurance you must purchase by law. Every state differs slightly. Next, look at your budget to decide how much you can pay each month without placing you or your family under any financial strain.

Once you complete these two steps, you can decide between any of the levels of insurance you think you will need. Remember, for each additional level of insurance you add, your premium will increase. If you decide to add other family members, take the age and experience of each driver into consideration.

With so many people confused about auto insurance today, it is extremely important that you research your options very carefully.

You do not want to overspend, but you must make sure that you have the exact level of coverage that will protect you in the unlikely event of a collision.

Now is the time to find a variety of car insurance rates, so do yourself a favor, and use the FREE ZIP code tool today!