Typical Auto Insurance Costs

Automobile premium costs are based on a number of factors, including risk group and geographic area.  Determining the insurance costs you can be expected to pay can be a factor in choosing an automobile.  There are some things that you can do as a responsible driver in order to reduce your insurance costs.

• Risk is the primary concern of insurance companies.  Inexperience is a risk factor that only improves with experience.  This simple fact is the reason that male drivers age 18-25 are considered the riskiest insurance group.  All drivers under age 25 are considered risky, which is why some rental car companies will not rent to younger drivers, and some insurance companies will not insure drivers under age 25.


• Consider this common real estate mantra: location, location, location.  While it may not make sense at first for where you live a factor in your auto insurance premium, population and traffic congestion are when determining risk.  More people, and more drivers create more opportunity for cars to collide and an auto accident to occur. 


• Ensure that you are taking full advantage of all discounts available to you.  Some insurance companies offer discounts ranging from good student to senior citizen.  Also, ask your agent if they offer multi car of multi policy discounts.  Often times using the same insurance carrier to cover your auto and home can help you save on both.  A knowledgeable insurance agent can help you take maximum advantage of the discounts available to you.


• Know your driving record.  A poor driving record can cost you hundreds, if not more, per year.  If your insurance premium is over the national average of $1,500-$1,800, ask your insurance agent for the reasons of the increase.  Just like mistakes can occur on your credit report, mistakes can occur on your CLUE report as well.  CLUE stands for Comprehensive Loss Underwriting Exchange, and helps insurance companies evaluate the amount of risk they are taking by insuring you as a driver.  Any inaccuracies should be immediately disputed and corrected. 


• Consider the terms of your specific auto policy.  Full coverage, which includes comprehensive and collision, will of course cost considerably more than a policy where these types of coverage are excluded.  If you drive an older car that is paid for in full, you may be paying for coverage that you don’t need if you opt for a full coverage policy.  Additionally, because claims increase insurance premiums overall, you will want to avoid the temptation of a policy with a lower deductible.  Pay claims out of pocket for minor damage.


• Check rates frequently.  Insurance rates can change across carriers, so from time to time seek out quotes from other companies.  When requesting other policy quotes, make sure you have a copy of your declarations page available so that your proposed policy mirrors the one already in place.