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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UPDATED: Oct 15, 2021

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A typical driver usually pays on average $850 per year for auto insurance coverage, according to the Insurance Information Institute. However, what you can expect to pay can be much higher or much lower, based on the coverage you opt to carry, demographics, your insurance and driving record, the car itself and other variables.

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By learning about the different factors taken into consideration by underwriters, you will be equipped to make changes where you can in order to lower your premiums. While several factors are impossible or time-consuming to change, in the long run, there can be significant savings for those who make the changes that are within their power.

Coverage Greatly Impacts the Price of Your Policy

If you carry the minimum amount of car insurance coverage that is required in your state, you will find that your premium is much lower than those with full coverage are. Typically, full coverage includes collision and comprehensive coverage on your vehicle, in addition to any minimum amounts of coverage as mandated by law. Also, full coverage usually includes medical payments and higher limits of liability coverage.

The amount of coverage you carry is determined by the value of your car, whether it is financed, and your own personal preference.

However, even if you choose to go with full-coverage, you do have the power to adjust coverage and deductibles to help keep the cost more affordable.

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Demographics Impact What Drivers Pay for Car Insurance

Where you live will greatly affect the price of your car insurance. If you park your vehicle in a city, you should expect to pay more for coverage than if you live in a rural area, due to the increased risk of accidents, theft, vandalism, lawsuits and more.

The state you reside in will also impact your car insurance cost. Each state varies on how much coverage is mandatory. In some areas, it is very little while in other states, it can be extensive. The population density of the state will also impact the cost of coverage. More densely populated states tend to be more costly for car insurance than sparsely populated ones.

Other demographic factors also will cost you when it comes to insurance. Males pay more, as do those under age 25. The Insurance Information Institute can tell you more about the impact of demographics and other factors on your car insurance.

The Past Affects What Drivers Pay for Car Insurance

What you have done in the past will have an effect on how much you will pay for car insurance. In fact, your driving record, any insurance claims you have made, and whether you have always carried insurance will affect the cost.

Quite simply, a clean driving record is the best way to keep your car insurance premium down. Traffic violations and accidents will result in higher premiums to offset the risk you present. Being an experienced driver will also help you get lower rates.

If you have made insurance claims for damage to your car in recent years, you will find that your insurance premiums are typically higher. If you have had gaps in your insurance coverage, you will also be charged higher premiums.

The Car Affects What Drivers Pay for Car Insurance

You can find yourself paying significantly more or significantly less for car insurance depending on the car that you drive. The age of the vehicle, the cost of replacement, whether it is an import or domestic car, the availability of parts and much more are all considered when setting the rate for insuring any given vehicle.

Typically you will find that luxury vehicles are by far the most expensive to insure. Sports cars are also much more costly to insure In fact a luxury sports car can easily cost three times more to insure than a reliable minivan. Before buying a vehicle, it is wise to check out the cost to insure it.

The short of it is in order to keep your car insurance premiums down, maintain a good driving record, choose your car wisely, always maintain insurance coverage and change the things you can, like deductibles.

Be sure to shop around comparing the coverage that is out there before you take out your next car insurance policy. Consult a reliable company that rates car insurance companies like Standard & Poor’s in order to learn about the strength and stability of the company before you select your coverage.

Find your ideal car insurance price quote now by inputting your ZIP code into the FREE box you will see on this page!