Penny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Written By Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Penny Gusner Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance.
Insurance Writer and Analyst Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
| Lead Editor, Insurance
Updated: Aug 22, 2024, 8:51am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Shopping for a new car or just savvy and want an idea of how much you should pay for auto insurance? You can quickly and easily get an estimate of how much car insurance costs with Forbes Advisor’s car insurance calculator.
Because a car insurance policy can be made up of several components, the best way to calculate how much car insurance you need is to look at each one separately.
Liability car insurance is required in most states and pays for accidental property damage and injuries you cause to others. It also covers the cost of your legal defense and judgments and settlements if you’re sued because of an accident.
Understanding liability insurance limits is critical to choosing the right amount of car insurance. A general rule of thumb is to buy enough liability insurance to cover what could be taken from you in a lawsuit.
Liability limits are written as a group of three numbers, such as 15/30/15, and breaks down to mean:
Buying only your state’s minimum amount of liability car insurance could be a costly mistake because these amounts are usually inadequate if you cause an expensive accident.
Collision and comprehensive insurance are often sold together and cover a wide range of problems, like accident damage to your own vehicle, car theft, collisions with animals, floods, fires, hail damage, vandalism and falling objects (like a tree branch).
No state has a law requiring you to carry collision and comprehensive insurance, but if you have a car lease or loan, your leasing company or lender usually requires this coverage.
You don’t need to choose a collision or comprehensive amount—your coverage will be based on the value of your vehicle, or the payout to you if your car is totaled. You only need to choose a deductible. This is the amount subtracted from your payout if you make a collision or comprehensive insurance claim, such as $500.
Even if you own your car outright, it’s worth considering buying collision and comprehensive insurance if you want coverage to replace or repair your car if it’s damaged due to a problem covered by your policy.
Some states, such as California, require only liability insurance. Others, such as New York, require additional coverage types. Here are other types of car insurance that may be required in your state:
Insurance Lead Editor
Insurance Lead Editor
The best way to find a good policy at a fair price is to compare car insurance quotes among multiple insurance companies. Rates can vary significantly from one insurer to the next because they assess risk differently. That’s why shopping around is one of the best ways to save money on car insurance.
Insurance Lead Editor
I recommend asking about all the car insurance discounts you may be eligible for, such as a good driving discount or multi-vehicle discount. Many discounts are applied automatically when you qualify. Others you’ll have to ask for because your car insurance company won’t know you’re eligible—such as a good student discount if you have a teen driver who has a B average or better
Insurance Lead Editor
You can save money by raising your car insurance deductible if you have collision and comprehensive insurance. Since your insurer will pay less if you file a claim, you’ll pay less in premiums. But be sure that you’re comfortable paying more out of pocket if you file a claim.
When you shop around for auto insurance among multiple car insurance companies, the best way to get an accurate quote is to provide detailed information about yourself and other drivers who will be on the policy. Here are the factors that generally affect a car insurance quote.
Young drivers pose a greater risk for accidents, so those under age 25 see much higher car insurance rates than other age groups.
Auto insurance companies can use age as a car insurance pricing factor when setting rates—except in California, Hawaii and Massachusetts. Car insurance rates remain fairly steady in your middle years—30s through 50s—and then start to creep up as you approach your 70s. Car insurance rates for seniors steadily rise as you get into your 70s and 80s due to age-related impairments that make you a higher risk for accident claims.
The less time you’ve had behind the wheel, the more you’ll pay for auto insurance. Younger and inexperienced drivers are more likely to be in more accidents, which results in higher car insurance rates.
Driving safely and keeping a clean driving record leads to cheaper rates. Here’s how certain infractions can result in rate increases:
Auto insurance companies look at your location to see what types and how many claims are filed in your area. Location-driven risk factors include accidents, theft, vandalism and other car-related crimes and claims, plus weather claims, such as hail or flooding. The cost of vehicle repairs and medical care will also affect car insurance costs where you live.
If you live in an urban area, you’ll normally pay more than drivers in the suburbs or rural areas. Cities have higher rates of car accidents, car theft and vandalism, which will be reflected in your car insurance rates even if you’re a great driver.
The type of car you drive impacts your car insurance estimate. Insurers analyze past claims that have been paid for specific car models, including the cost of repairs and theft rates, which can impact the cost of optional coverage types like collision and comprehensive insurance. If your vehicle model costs more to repair or replace, expect to pay more for car insurance.
Car insurance companies usually use a person’s credit when setting rates—except in California, Hawaii, Massachusetts and Michigan.
The use of a credit-based insurance score in setting car insurance rates is controversial, but car insurance companies point to a Federal Trade Commission report that correlates a person’s credit score and the likelihood of making an insurance claim. As a result, you can see a car insurance rate increase if you have bad credit.
Our data analysis found drivers with poor credit pay 76% more on average for car insurance than those with good credit. But not all insurers use credit in the same way, which is why it’s crucial to shop around for better rates.
If you have a gap in your car insurance coverage, you will pay higher rates than drivers who kept continuous coverage. Your risk as a driver is higher to car insurance companies when you have gaps in your car insurance history. Maintaining insurance shows stability, making you less of a risk.
Selecting a bare-bones liability car insurance policy will cost less than buying full coverage car insurance that includes comprehensive and collision coverage. But the trade-off is that you’ll leave yourself vulnerable to large car accident lawsuits that aren’t fully covered by insurance.
Car insurance deductibles are associated with collision and comprehensive coverages. You select your deductible, which typically range from $500 to $2,500. The higher the deductible you choose, the less you’ll pay. This is because your deductible is the amount subtracted from a claim check, so your insurance company pays less when you choose a higher deductible.
Insurance Senior Writer
– Brian S., Athens, Georgia
The best way to get an idea of how much you’ll pay is to get several car insurance quotes. You can do this online at insurance company websites, or work with an independent auto insurance agent, who will be able to give you multiple quotes. Another way to estimate your cost is to use online tools such as our car insurance calculators.
Insurance Senior Writer
We used data from Quadrant Information Services, a provider of insurance data and analytics. Rates are based on liability coverage of 100/300/100 ($100,000 in bodily injury liability per person, $300,000 per accident and $100,000 in property damage liability), uninsured motorist coverage, and collision and comprehensive coverage insurance with $500 deductible for a 40-year-old female.
With so many choices for car insurance companies, it can be hard to know where to start to find the right car insurance. We've evaluated insurers to find the best car insurance companies, so you don't have to.
If you go on to compare car insurance quotes and buy a policy, you’ll want to have on hand:
Choosing a higher deductible will lower your car insurance premium, and choosing a lower deductible will generally increase what you pay. That’s because a higher deductible means you pay more out-of-pocket for a collision or comprehensive insurance claim before your car insurance kicks. This reduces the insurer’s cost.
Discounts can impact your car insurance estimate by reducing the total premium you pay. To get an idea of how discounts can change your car insurance costs. The types of discounts, the eligibility criteria and potential savings vary among insurance companies. When you compare quotes, make sure you’re comparing costs that factor in the discounts you’ll receive.
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Insurance Writer and AnalystPenny Gusner is a senior insurance writer and analyst at Forbes Advisor. For more than 20 years, she has been helping consumers learn how insurance laws, data, trends, and coverages affect them. Penny enjoys translating the complexities of insurance into easy-to-understand advice and tips to help consumers make the best choices for their needs. Her work has been featured in numerous major media outlets, including The Washington Post and Kiplinger’s.
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