Standard Car Insurance Rates – What Prices Should You Expect?

Standard car insurance rates are dependent on many factors. Rising costs in medical care and car repairs have made a significant impact on auto insurance costs over the last few years, so many drivers are scrambling to find more affordable prices. Countless websites boasting cheaper rates and more available quotes pop up on search engines daily. So what prices should you expect to pay?

8 Factors Insurance Companies Look At

1. Age. Due to statistical evidence, young drivers, especially under 25 make more mistakes and file more claims than any other group. This is why rental companies do not allow drivers under 25 to rent a car.

2. Sex. Many companies offer cheaper insurance to women because data shows women drive more practical vehicles and make fewer claims.

3. Marital Status. Strangely, providers' data also shows that unmarried people are more accident prone than married people.

4. Driving Pattern. The more mileage the driver puts on the car, the more providers will charge for insurance.

5. Claims History. Insurance companies project if the driver has needed to make claims in the past, then he or she is more likely to make more claims in the future. Most insurers look at the past 3 to 5 years to determine this likelihood. More claims means higher rates.

6. Geographical Area. This has a huge influence on insurance costs. State to state, there are different laws on required coverage that may cost you more. Providers also consider cost of repairs, traffic density and extreme weather conditions in the area.

7. Credit History. Providers have found a direct correlation between a driver's credit history behaviors and how many claims they are likely to make. The better your credit history, the better your premium.

8. The Vehicle. The make, model and year of your car also affect insurance rates. Generally, luxury cars cost more to repair, sports cars are driven at higher speeds causing more damage in an accident and older cars need more repairs.

The state and area you live in is possibly the most influential factor affecting your insurance premium. Places with a higher traffic density mean more accidents, so insurance agencies charge more in these areas, this means the standard auto insurance cost rises. Other factors that can send premiums skyrocketing are state required coverage, labor costs, repair prices and the rate of car theft.

1. Liability. Covers bodily injury and property damage you may inflict on others in a car related accident.

2. Medical Payments(Medpay)/ Personal Injury Protection (PIP). Covers medical expenses and, in the case of PIP, wages lost by you and your passengers in an accident.

3. Uninsured Motorists/ Under-insured Motorists. Covers medical expenses if you have an accident with an uninsured or under-insured driver or are a victim of a hit and run.

According to National Association of Insurance Commissioners 2007 statistics, the states with the three highest average auto insurance rates where Washington D.C. at $1,140, New Jersey at $1,104 and Louisiana at $1,096. The high population and traffic densities of Washington D.C. and New Jersey are major factors in the high costs in the two states, as well as their coverage requirements. Both states require Uninsured/Under-insured Driver insurance, and New Jersey requires PIP insurance, as well. Louisiana's high rates are said to be a consequence of the various repercussions caused by Hurricane Katrina.

The three lowest rates are $512 in North Dakota, $536 in Iowa and $554 in Nebraska. These are all areas of very low population density and don't require PIP or Uninsured/Under-insured Driver coverage.

Calculating the expected costs of your insurance premium can be a complicated process. With personal data to consider like age, credit history and marital status, in addition to state laws and conditions, it's difficult to accurately predict a price. The NAIC's 2007 report claims that on average American pay $795 for car insurance. But with the highest and lowest rates in the country having about a $600 difference, this average is not a clear representation. To find out how much people are paying in your area, the NAIC is a good place to start.

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