How Much Is Auto Insurance?

Name: ALLCHOICE Insurance
Price range: $

The cost of auto insurance in North Carolina depends on a variety of factors. The average cost for “Full Coverage” auto insurance is $1,446 Per Year ($121 Per Month). The average cost for liability-only (state minimum) coverage has a significantly lower premium of $432 Per Year ($36 Per Month). However, your rate will vary based on things like your age, driving history, location, and the type of car you drive.

Home > Auto Insurance Education > How Much Is Auto Insurance?

How much is auto insurance going to cost you? Typically, Americans shell out an average of $1,539 to $1,547 per year for standard coverage, but that’s just the tip of the iceberg. The type of coverage you choose and your individual profile could drastically change this figure. Get ready for a tour of average rates, the influences behind them, and the various means to keep costs down—all without drowning in the fine print.

Key Takeaways

The national average annual cost for auto insurance in 2024 is between $1,539 and $1,547 for minimum coverage, with full coverage averaging around $2,543, reflecting the broader protection it offers including liability, comprehensive, and collision coverage.
Several factors such as age, driving history, credit score, and vehicle type influence auto insurance rates; younger or inexperienced drivers, those with a history of violations or accidents, and the owners of luxury, sports, or electric vehicles tend to face higher premiums.
Auto insurance rates vary significantly from state to state, affected by local laws, cost of living, accident frequency, and other regional factors, with some states like Florida and Michigan experiencing notably higher rates due to unique state insurance requirements and conditions.

National Average Cost of Auto Insurance

Nationwide, auto insurance rates paint a picture of the average American driver’s experience. As of 2024, the national average annual cost for auto insurance hovers between $1,539 and $1,547. However, if you opt for full coverage, expect to see that number jump to around $2,543 annually. But why this stark difference in costs?

Shedding light on this requires understanding the difference between full coverage and minimum coverage. Full coverage auto insurance typically includes not only state-required liability coverage but also comprehensive and collision coverage. This means in the event of an accident, your policy would cover both your vehicle’s repair or replacement costs and the other driver’s vehicle and medical costs. On the other hand, minimum coverage, as the name implies, only covers what the state mandates, usually only the other driver’s vehicle and medical costs. The increased protection offered by full coverage car insurance, which includes comprehensive coverage, justifies its higher price point in terms of insurance coverage.

Full Coverage vs. Minimum Coverage

So, how much more does full coverage cost compared to minimum coverage? On average, drivers with full coverage car insurance pay around $212 per month, while those with minimum coverage part with about $62 monthly. When calculated annually, low-coverage policies average at $1,470, while high-coverage policies have a national average rate of $1,643. This implies that full coverage car insurance costs about 243 percent more than minimum coverage.

While the cost difference might seem significant, it’s important to remember that with minimum coverage, drivers may save on premiums but could find themselves financially vulnerable if they cause an accident. The decision between full coverage and minimum coverage should therefore balance cost savings with the level of financial risk you’re comfortable with.

Top Car Insurance Companies and Their Rates

Your choice of car insurance company can also influence your auto insurance premiums, and it’s here that shopping around can pay off. Some insurance companies consistently offer competitive rates for average car insurance. For example, Erie Insurance offers an average annual rate of $1,022 for good drivers, significantly below the state average.

However, these rates can fluctuate based on your driving history. For instance, for drivers with one speeding ticket:

Erie Insurance still offers one of the cheapest rates.
After a DUI conviction, National General (NatGen) offers competitive premiums.
Even your credit score can affect your rate, with NC Farm Bureau Insurance sample rates being the lowest for drivers with poor credit, at below the state average.

The lesson here? Always work with an independent insurance agent who can compare rates to ensure you’re getting the best value.

You can read more of our blogs about Auto Insurance for more information.

DID YOU KNOW? While the type of car you drive significantly impacts your insurance rates, factors such as your credit score and driving history play substantial roles too. For instance, drivers with poor credit can pay up to 118% more for their insurance compared to those with excellent credit.

Factors That Influence Auto Insurance Costs

Now that we’ve examined the national landscape and the impact of different coverage levels and insurance providers, let’s delve deeper into the personal factors that can influence your auto insurance rates. Car insurance companies set prices based on an educated guess about the likelihood of a claim, assessing various factors. These factors include:

Your age
Your driving history
Your location
The type of vehicle you drive

Moreover, how you use your vehicle and your annual mileage also play a significant role in determining your insurance premiums. If you use your car frequently or for business, or if you clock in high annual mileage, you may face higher premiums due to the increased risk of accidents. Even external factors like inflation can impact rates, with the rising costs for:

vehicle repairs
labor
parts
vehicle replacement

leading to a rise in auto insurance premiums.

Now, let’s break down these factors and explore how each can impact your auto insurance costs.

Driver’s Age and Experience

Age is more than just a number when it comes to auto insurance. Drivers with less experience on the road often face higher auto insurance premiums, making it important for them to carefully consider their options when purchasing coverage. This is due to factors such as increased risk of accidents and insurance claims. This is because insurance companies view young, inexperienced drivers as a bigger risk. However, as drivers mature and gain more experience, their rates typically decrease. This trend continues until the driver reaches their 70s, at which point rates start to climb again due to the higher accident risk associated with older drivers.

Gender can also influence auto insurance rates, particularly for young drivers. Statistically, young men are often seen as riskier drivers, as they are more likely to engage in risky driving behaviors and experience accidents. As a result, they often pay more for auto insurance than their female counterparts.

Driving Record and Violations

Your driving record can significantly impact your auto insurance rates. If you’ve caused an accident, you can expect to see your car insurance costs increase by around 40% on average. Even if you’re not at fault in an accident, your premiums may still increase, highlighting that any involvement in an incident can affect your insurance rates.

Specific violations can also lead to higher premiums. For example, drivers with one speeding ticket can see their rates increase significantly, with USAA offering the cheapest average rate at $1,935 annually, a notable increase from their rate for good drivers. These violations can stay on your record for three to five years, contributing to elevated insurance costs over time.

Credit Score

Believe it or not, your credit score can also affect your auto insurance rates. Insurers in most states use credit-based insurance scores to help set premiums, as individuals with good credit generally file fewer claims. As a result, drivers with good credit often pay less for auto insurance than those with poor credit.

Poor credit can lead to higher auto insurance rates due to the increased likelihood of filing claims. However, if you find yourself in this position, don’t despair. Improving your credit score can lead to lower insurance premiums over time.

State-by-State Comparison of Auto Insurance Costs

Now that we’ve discussed personal factors that can influence your auto insurance premiums, let’s examine how your geographic location can impact your rates. Auto insurance costs can vary significantly from state to state due to factors like:

accident frequency
local laws
cost of living
the number of licensed drivers
traffic density
weather patterns
local claims history

Each state also has its requirements for car insurance, which can contribute to cost differences. These requirements usually specify minimum coverage limits and other types of coverage that drivers must carry. To give you a clearer picture of how these factors play out, let’s examine the states with the lowest and highest auto insurance rates.

Cheapest States for Auto Insurance

In terms of low average annual full coverage auto insurance rates, the states with the lowest rates are:

Vermont
Idaho
Maine
Ohio
Wyoming

The lower populations in Ohio, Maine, and Idaho lead to fewer car accidents, resulting in less money paid out by insurers and consequently, more affordable insurance premiums.

Weather patterns and geographical characteristics also contribute to lower rates in these states. For instance, milder weather patterns and predominantly rural areas in states like Vermont, Idaho, and Wyoming result in fewer weather-related accidents and claims, allowing insurance companies to charge less for premiums.

Most Expensive States for Auto Insurance

Florida, New York, Louisiana, Nevada, and Michigan have the highest average cost for full coverage car insurance, representing the more expensive end of the spectrum. These states face a combination of challenges that contribute to high insurance costs, such as:

high rates of uninsured drivers
extensive litigation
natural disasters
urban density

In addition to these factors, state-specific insurance laws and regulations can also impact costs. For instance, Michigan has a unique no-fault car insurance system, which provides unlimited lifetime medical benefits to auto accident victims. This has led to high costs for insurers and subsequently high premiums for drivers.

Auto Insurance Costs by Vehicle Type

Let’s shift gears and discuss how the type of vehicle you drive can impact your auto insurance rates. If you’re a fan of sports cars, luxury cars, or hybrid/electric vehicles, you may need to brace yourself for higher premiums. High-performance and luxury vehicles often incur higher insurance costs due to greater repair expenses and a higher likelihood of theft.

Let’s take a closer look at how these vehicle types can affect your auto insurance costs.

Sports Cars

Sports cars are designed with speed and agility in mind, and these characteristics often come with higher insurance costs. High horsepower is linked to higher speeds and increased accident risk, contributing to higher insurance premiums. The cost of sports car repairs, often equipped with expensive custom parts, also increases the cost of insurance for these vehicles.

On average, insurance for sports cars can be up to twice as expensive as insurance for standard vehicles. This is due to factors like high repair costs and a higher risk of theft. If you’re considering buying a sports car, be prepared to factor in these higher insurance costs.

Luxury Cars

Luxury cars are another category of vehicles that usually come with higher insurance costs. These vehicles often come equipped with high-end safety and performance features along with luxurious interiors, which lead to higher repair costs. The replacement costs for these vehicles if they are totaled in an accident can also be substantial, further elevating insurance rates.

Specific luxury vehicles, such as BMW, Mercedes Benz, and Maserati, fall into higher insurance categories because they carry greater expenses to replace and repair. If you’re in the market for a luxury car, be sure to budget for these higher insurance costs.

Hybrid and Electric Vehicles

If you’re considering going green with a hybrid or electric vehicle, it’s important to know that these vehicles can also come with higher insurance costs. Hybrid vehicles often have higher insurance rates than conventional cars due to their higher repair costs and the value of the vehicle. Electric vehicles can be more expensive to insure than traditional vehicles because of their advanced technology and the cost to replace batteries and other components.

However, there’s some good news. As this technology becomes more common and technicians become more familiar with these vehicles, repair costs and hence insurance costs may decrease. Some insurance companies may even offer discounts for these environmentally friendly vehicles, which can offset the higher premiums.

Discounts and Ways to Save on Auto Insurance

While we’ve covered a lot of factors that can increase your auto insurance costs, it’s time to shift our focus to the brighter side of things – discounts and ways to save on auto insurance.

There are numerous discounts available that can significantly reduce your auto insurance premiums. Coupled with strategies like maintaining a clean driving record and comparing insurance options, you can secure a more affordable auto insurance policy.

Types of Discounts Available

Insurers often provide a variety of discounts to attract and retain customers. One common discount is for bundling multiple policies, such as a car insurance policy and home insurance, which can save you around 20 to 30 percent on your premiums. If your vehicle is equipped with safety features like anti-lock brakes and airbags, you may also be eligible for discounts.

For those who drive fewer miles, particularly less than 6,000 miles per year, you may benefit from lower annual insurance rates due to low-mileage discounts. These discounts are especially beneficial for those working from home or retirees who don’t commute regularly. If you install anti-theft devices in your vehicle, you can also qualify for discounts as they signify a reduced risk of theft-related claims.

Tips for Lowering Auto Insurance Costs

Aside from taking advantage of discounts, there are other strategies you can use to lower your auto insurance costs. One of the most effective ways is to shop around and compare quotes from multiple insurance providers. By doing so, you can ensure you’re getting the best deal for your specific needs. Even after a DUI, shopping around can help you find more affordable car insurance.

Maintaining a clean driving record is also key to reducing auto insurance costs. Insurance companies often reward safe drivers with lower premiums. Qualifying for multiple discounts and combining them with a multi-policy discount can also help maximize savings on your auto insurance premiums. Lastly, remember to review and update your policies after significant life events, such as getting married or moving, as these can impact your auto insurance rates.

Special Circumstances and Auto Insurance Costs

Now let’s discuss some special circumstances that can significantly impact your auto insurance costs. Situations like causing an accident, getting a DUI conviction, or having poor credit can lead to higher premiums. These scenarios highlight the importance of maintaining a clean driving record and good credit and the potential financial consequences of risky driving behaviors.

Accidents and Their Impact on Rates

If you cause an accident, you can expect to see your car insurance costs increase by around 40% on average. The severity of the accident and existing policy discounts, like accident forgiveness or good driver discounts, can also impact how much your rates increase. These increased rates can stay in effect for three to five years, so driving safely can pay off in the long run.

DUI Convictions and Auto Insurance Costs

A DUI conviction can be a game-changer when it comes to auto insurance costs. On average, drivers with a DUI conviction pay around 86% more for car insurance compared to drivers with a clean driving record. The average annual increase in full coverage car insurance costs after a DUI is approximately $1,712.

These increased costs can vary based on state laws and personal rating factors. It’s also important to note that some insurance companies might refuse to renew a policy following a DUI, while others specialize in policies for high-risk drivers. Therefore, if you have a DUI conviction, it’s important to shop around for insurance.

Poor Credit and Auto Insurance Premiums

Lastly, your credit score can have a significant impact on your auto insurance premiums. Drivers with poor credit pay on average 118% more for full coverage car insurance than those with excellent credit. Your credit score influences your insurance rates because insurers use credit-based insurance scores to predict the likelihood of an insurance loss.

However, there are some exceptions. States like California, Hawaii, Massachusetts, and Michigan have regulations that restrict the use of credit scores to determine auto insurance rates. These regulations aim to ensure fair pricing for all drivers. If you have poor credit, improving your credit score over time can lead to lower auto insurance premiums.

Auto Insurance Quote

SERVE. EDUCATE. PROTECT.