Choosing the right car insurance can make a significant impact on your ability to cover damage costs and liabilities. As a driver, it’s important to invest in quality car insurance that can protect you in cases of unforeseen circumstances on and off the road, such as collisions, severe weather, and theft. While paying for car insurance can certainly save you money in the event of damages, you may also find yourself paying hefty monthly premiums that can make a large impact on your finances.
Keep reading to learn about what car insurance is, what it can cover, and how much it can cost you per month, on average, depending on factors such as age, experience, and location.
What Is Car Insurance?
Car insurance is a type of contract between you, the driver, and an auto insurance company. The insurance company covers damages and liabilities in exchange for monthly premium payments. A typical car insurance plan involves the company assessing your driving history and other factors including location and age to determine your monthly premium. People with what insurers consider a higher risk of getting into accidents may have to pay higher monthly premiums than those they deem safe drivers.
Other factors, such as finances, can impact your monthly premium. For example, insurance companies often offer discounts to those who pay their annual premium in full as opposed to making smaller monthly payments. You can also save money on car insurance by paying more in deductibles. A deductible is the amount of money you pay whenever you’re in need of damage coverage from the insurer. If you decide to pay higher deductibles, your monthly premiums can decrease. By avoiding damages through safe driving, you may not even have to pay deductibles while still benefiting from a lower monthly premium.
What Does Car Insurance Cover?
Here are some of the most common types of damages that car insurance can cover:
- Liability Coverage: Liability insurance covers costs related to accidents or damages you caused as the driver. Most liability insurance coverage plans consist of two categories: bodily injury and property damage, both of which the injured party must file a claim against your insurance.
- Collision Coverage: As you may expect, collision coverage covers damages to your vehicle that result from any sort of accident, whether you were at fault or not. This includes damages from collisions with other vehicles, objects like trees or poles, or even driving over a ditch.
- Comprehensive Coverage: Comprehensive coverage refers to any damages that happen to your vehicle that aren’t the result of an accident. This can include damages relate to severe weather, theft, and even vandalism that occurs out of your control.
- Personal Injury Protection: Personal injury protection insurance is a type of no-fault plan that covers costs when you or your passengers become injured after an accident. This includes medical bills, care costs, and even lost wages should your injuries prevent you from making a stable income.
How Much Is Car Insurance a Month on Average?
According to QuoteWizard, the average cost of car insurance per month across the U.S. is approximately $87. It’s important to consider that this is a national estimate, and many outside factors can contribute to how much you have to pay for car insurance, including:
- Age: Your age can make a significant difference in how much you pay per month in car insurance premiums. In general, rates decrease as you age, although they may increase once again after you hit the 70-year mark.
- Location: Where you live can also impact your monthly premium. Some states have higher premiums than others based on population, transportation options, and overall driving practices and infrastructure.
- Car: The car you drive is another factor that can influence your monthly insurance payments. More expensive cars tend to have higher premiums because it costs more for the insurer to replace parts and pay for repairs on these vehicles.
- Driving history: Your driving history can impact how much an insurance company charges you in monthly premiums, especially if you have a long history as a safe driver. Generally, companies offer discounts to safe drivers as they won’t have to cover damages for them as often as more at-risk drivers.
Tips for Paying Less for Car Insurance
Here are some helpful tips you can follow to pay less on monthly premiums for your car insurance:
- Compare Rates: One of the best tips you can follow when looking for lower car insurance costs is to compare rates from different companies. Shop around and explore all of your options to determine which insurer provides the most benefits compared to their costs.
- Research Discounts: It’s common for auto insurance companies to offer incentives for safe driving, typically as discounts. Research all the discounts your insurance company offers to determine what you qualify for, with some common ones including discounts for installing safety devices, safe driving records, and, for young drivers, even having good grades.
- Practice Safe Driving: The best effort you can make toward paying less in monthly car insurance premiums is to practice safe driving. Car insurance companies often give discounts to people whom they certify as “safe drivers” based on your driving record, so avoiding accidents, citations, and damages can end up saving you much more than your potential damage costs.
It’s important to find a car insurance plan that’s compatible with your driving needs. While someone who only drives a short distance each day in mild weather may not need extensive coverage, another person who travels extensively in all types of terrain could certainly benefit from investing in a more substantial car insurance package. There are so many factors that can contribute to the amount of money you pay per month in car insurance premiums, making it important to explore all of your options to determine the best company and package for your circumstances.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.