Why Is My Car Insurance So Expensive in 2024?
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If your car insurance is too expensive, a number of reasons could explain your high rates.
Common causes for expensive insurance rates include your age, driving record, credit history, coverage options, what car you drive and where you live.
Anything that insurance companies can link to an increased chance that you will be in an accident and file a claim could result in higher car insurance rates.
Factors that affect car insurance rates
Six main factors can contribute to expensive car insurance rates:
Your insurance company and coverage
If you're buying car insurance from an expensive company, you could pay much more than you need to.
The average cost of full-coverage insurance is $164 per month for a good driver.
However, that same driver could pay $124 per month with State Farm for full coverage. On the other hand, full coverage from Farmers costs around $258 per month. So switching from Farmers to State Farm could cut your car insurance bill in half.
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The only way to help ensure you're paying the best price is to shop around and get quotes from multiple insurance companies.
Full-coverage car insurance rates by company
Company | Monthly rate | ||
|---|---|---|---|
| State Farm | $124 | |
| American Family | $160 | |
| Travelers | $160 | |
| Geico | $161 | |
| Progressive | $169 | |
*USAA is only available to military members, veterans and their families.
Your car insurance coverage
The more car insurance you buy, the more you can expect to pay.
A full-coverage policy costs two and a half times more than one with minimum liability coverage only.
That's because full coverage typically includes comprehensive and collision insurance. These coverages pay to repair or replace your car if it is damaged.
Higher liability limits or a low deductible can also raise your monthly payments. So can popular add-ons, like roadside assistance or rental car reimbursement. That's because if you get in an accident, the insurance company could possibly have to pay more.
How to save: You can save money by canceling extra coverage you don't need. For example, you may not need rental car reimbursement if you have more than one car in your household and can share a vehicle while yours is in the shop.
Keep in mind that you may have to have comprehensive and collision coverage if you have a loan or lease on your car. And if you're in an accident, you'll have to pay for any damage over your insurance limits.
Your age and gender
Younger drivers pay much more for car insurance than older drivers.
Full-coverage car insurance for an 18-year-old costs about three times as much as the same coverage for a 30-year-old. The main reason for these high rates is that young drivers have less experience behind the wheel and tend to be less careful. That makes them more likely to get into car accidents that result in expensive claims for insurance companies.
Young men typically have the most expensive car insurance rates. At age 20, men pay about 12% more for full-coverage insurance than women of the same age. However, the difference evens out as drivers get older.
In some states, companies are not allowed to consider gender when setting car insurance rates.
How to save: The best way for young drivers to get cheap car insurance is to share a policy with an older family member. Doing so can reduce your overall insurance bill by 62%.
If you aren't able to share a policy with a family member, State Farm typically has the cheapest rates among national companies for teens with their own car insurance policy.
Younger drivers can also qualify for good student discounts or take training courses to bring rates down even more.
Where you live
Your car insurance could be expensive if you live in certain states, cities or ZIP codes.
Drivers in the most expensive state for car insurance, Michigan, can expect to pay four times more for full coverage than people who live in Maine, the cheapest state for car insurance.
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Many factors impact insurance rates in a state, including the number of uninsured drivers, how safe roads are and the number of severe weather events.
The cost of insurance can vary within a state, or even within a city. If you live in an area with high car theft rates or narrow roads that lead to many accidents, you may pay more than you would elsewhere.
For example, there's a price difference of $49 per month between the cheapest and most expensive ZIP codes for car insurance in San Francisco.
How to save: Although car insurance is just more expensive in some areas, you may still be able to find cheaper rates by comparing quotes from multiple companies.
It's important to remember that there may be more affordable options in your area than the cheapest company nationally.
For example, State Farm typically has some of the lowest rates in the country. But in Michigan, car insurance from State Farm is more expensive than average. Michigan drivers can find much cheaper rates at Progressive, which isn't always affordable in other states.
Your car
The type of car you drive can greatly impact how much you pay for car insurance.
Cars tend to be more expensive to insure if they are:
- Newer
- Faster or more powerful
- More expensive
- Smaller
Smaller cars are typically more expensive to insure than bigger, safer cars like minivans and small SUVs. This could be because smaller cars tend to sustain more damage in a crash.
Full-coverage rates by car brand
The more expensive your car is, the more expensive it will be to protect with comprehensive and collision coverage. That's because it will likely cost your insurance company a lot of money to repair or replace it after an accident. In addition, hybrid cars usually cost more to insure because the technology they use can be pricey to replace.
Meanwhile, a very fast or powerful car may encourage aggressive, reckless driving, resulting in higher rates.
How to save: If you have a car that's expensive to insure — like a luxury vehicle, a convertible or a muscle car — switching vehicles may result in a big savings on your insurance bill.
Your driving record
Drivers with recent accidents or tickets on their records usually pay higher car insurance rates than those with clean records.
Adult drivers who recently caused a crash pay 49% more for car insurance than those with no accidents or tickets. Insurance companies consider these drivers high risk because they're more likely to be in a future accident.
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Those who get a more severe ticket, like a DUI, tend to pay even higher rates for car insurance.
How to save: Some states and insurance companies allow you to reduce the effect of a ticket on your record by taking a defensive driving course. In some cases, companies look at your record and not the points. So make sure to check with your company before taking a course.
Otherwise, you must wait three to five years for the ticket to fall off your record. The same goes for a crash.
However, you could find cheaper rates than you're currently paying by shopping around. State Farm and Progressive tend to offer the cheapest rates for drivers with a bad record. Auto-Owners and Erie also often have good rates, although these companies aren't available in every state.
Your credit score
Car insurance companies sometimes consider your credit score when setting your rates.
Drivers with poor credit or no credit history often pay more for insurance. This is because insurance companies believe they're more likely to file a claim in the future than those with good credit.
California, Hawaii, Massachusetts and Michigan have banned the use of credit scores to calculate auto insurance rates. If you live in one of these states, your credit score will not affect your rates.
How to save: You should review your credit reports regularly to ensure they are accurate. Incorrect or false entries on your credit reports could be lowering your score.
Beyond that, paying your credit card and other bills on time is the most important thing. Doing this will help your credit score improve, and you should see your rates go down over time.
In the meantime, compare quotes from Geico and Farm Bureau. These companies have the most affordable rates for drivers with bad credit.
What to do if you can't afford car insurance
If you can't afford your car insurance, you should shop around to find the cheapest quotes, look for discounts and adjust your coverage.
Young drivers can also get cheaper rates by staying on their parent's policy instead of getting their own.
Compare quotes from multiple companies
The easiest way to find cheaper car insurance rates is to shop around for quotes from multiple insurance companies. Even if one company is charging you high prices, you may still be able to find a great price elsewhere.
Find Cheap Auto Insurance Quotes in Your Area
Look for discounts
Most car insurance companies offer discounts to help their customers save money on their car insurance bills. Remember that the amount you can save and how you qualify varies by insurance company.
Common car insurance discounts
- Bundling: Get multiple insurance policies with one company and save 5% to 25%.
- Defensive driving: Take a defensive driving class and earn a discount of 10% to 15%, on average.
- Good student: Be a full-time student with a GPA of 3.0 or better to earn a 5% to 25% discount.
- Vehicle anti-theft: Install an anti-theft device in your car, like a GPS vehicle tracker, to earn a 5% to 15% discount.
- Occupation or professional organization: Members of professional organizations, like Freelancers Union, an alum group or other organizations, can earn a discount of 2% to 10%.
Adjust your coverage
You can make several changes to your car insurance coverage that can make your rates less expensive.
Get rid of coverage you don't need
For example, it may not be worth it to have comprehensive and collision coverage if you don't have a loan and your car is over eight years old or worth less than $5,000.
On average, minimum liability insurance costs $100 per month less than a policy with higher liability limits plus comprehensive and collision. You could save a lot of money by lowering your coverage. But be careful not to drop your limits too low, especially your liability limits.
If you hit someone and your liability limits are too low to pay for their damage, you'll have to pay for it yourself. And if you drop comprehensive and collision, you'll have to pay to repair or replace your own car after an accident.
Raise your deductible
Changing your deductible can greatly impact the cost of full-coverage insurance. That's because your car insurance company won't pay you as much money after an accident.
But you should choose a deductible you can easily pay in an emergency. Otherwise, you could find yourself in a tough spot after an accident. And if you raise your deductible too much, you won't be able to use your insurance to pay for smaller repairs.
Lower your liability limits
Less coverage almost always leads to cheaper rates. But choosing lower liability limits should be your last resort. You will save very little by having lower liability limits. However, you could end up with a hefty bill if you're in a major accident.
For example, $50,000 of bodily injury coverage per person and $100,000 per accident only costs around $11 more per month than $25,000 of coverage per person and $50,000 per accident. But if you cause a crash and the other driver has $40,000 in medical bills, you'll be responsible for paying $15,000 with the cheaper policy. The more expensive option would cover all of the costs.
Other ways to save
If your car insurance is still too expensive, there are a few other ways to lower your monthly cost.
Frequently asked questions
What factors affect car insurance rates?
There are six main factors that typically affect your car insurance rates: your insurance company and coverage, your age and gender, your driving history, where you live, the car you drive and your credit score. Many other things help companies determine your rates, but these tend to have the biggest impact.
What should you do if your car insurance is too high?
If you can't afford your car insurance payment or you think you're paying too much, start by comparing rates from other companies. You might be able to get the same coverage for a cheaper price. Additionally, make sure you have all the discounts you are eligible for and review your coverage to make sure it's right for your needs.
Why is my car insurance so high?
If your car insurance rate is high, it likely means your insurance company thinks you are more likely than an average driver to cause an accident or file a claim. This might be because you are younger or inexperienced behind the wheel, you've had recent accidents or tickets, you drive an expensive or dangerous car, or you live somewhere where accidents are more common.
Methodology
ValuePenguin's analysis used 2024 insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used only for comparative purposes — your quotes may differ.
The savings a young driver can achieve by staying on their parents' policy is from a separate data set, using 2023 rates from Texas, Pennsylvania and Ohio. Vehicle-specific rates are also for 2023 and come from a separate data set, using rates from either California or Ohio.
Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.