What is the Average Cost of Auto Insurance: If you’re wondering how much auto insurance should cost, it’s important to consider the average cost of auto insurance in your state. You might think that the average cost of auto insurance is the same as the median, but the two are actually very different figures. In order to answer the question of what is the average cost of auto insurance, we first need to understand how this amount is calculated and what its limitations are.
The Most Common Types of Coverage
There are many types of auto insurance coverage you can choose from to protect yourself and your car. The most common types are liability, collision, comprehensive, medical payments, and uninsured motorists. Liability pays for injuries to others and damage to their property if you’re found legally responsible for an accident. Collision covers damage to your car in a crash with another vehicle or object. Comprehensive pays for non-collision damages like weather damage or theft. Medical payments will cover medical costs if you or your passengers are injured in an accident – whether you’re at fault or not.
Liability Coverage
This type of coverage comes in handy when you’re in an accident and someone else sues you for damages. If you have too little liability coverage, it can become a financial burden to handle a lawsuit – even if it’s frivolous. If you drive without liability insurance, expect your auto insurance rates to jump dramatically, and try not to get into an accident! The legal system has its own version of Three Strikes and not carrying enough liability will set off three strikes against you.
Collision Coverage
The average cost of collision coverage will depend on your deductible, which varies by state. For instance, if you set a $500 deductible, then you’ll have to pay for repairs in excess of that amount out-of-pocket. With $500 deductibles, collision coverage can be quite affordable; however, deductibles exceeding $1,000 are much more common and can make insurance more expensive. More often than not, it’s better to choose a higher deductible as that can significantly reduce your annual premium payments without costing you much at all when you make a claim.
Comprehensive Coverage
If you want to know how much auto insurance you need, one way to find out is by talking with your agent. Discuss your driving history and compare that with your automobile’s value, as well as how often you drive it and where. The more expensive your car and how often you drive it, for example, will generally raise your monthly premium. Your habits behind the wheel can also affect how much auto insurance coverage you need: If you commute long distances every day or if there are several people in your household who do so, make sure to discuss potential discounts with an agent.
Deductibles and Premiums
The main way to save money on your auto insurance policy is to increase your deductible. The higher you set it, up to a point, the less you’ll pay in monthly premiums. But if something does happen and you end up using your coverage, that’s when you’ll feel how much you really paid for that extra protection. A few simple steps can help determine what type of deductible will work best for your budget
How to Reduce Your Rates
Answering a few simple questions can help you save hundreds each year on your auto insurance premiums. A little comparison shopping can go a long way. Be sure to know: 1) What kind of coverage does your state require (liability, comprehensive, collision), 2) what discounts are available for good drivers, and 3) how much you can reasonably expect to pay based on your own situation.
Tips for Safe Driving
Just because your car has safety features like airbags, anti-lock brakes, and side-impact beams doesn’t mean you should drive distracted. The National Highway Traffic Safety Administration (NHTSA) estimates that 3,000 lives are lost each year as a result of vehicle crashes involving distracted drivers—and it can take only three seconds to become distracted. Buckle up and put your phone away. If you feel unsafe at any time while driving, contact your nearest police department or dial 911 to report dangerous road conditions or a broken traffic light that could endanger other drivers.
