Auto insurance USA requirements include a minimum level of liability insurance in most states. If you drive a vehicle, you need auto insurance. Your rates will vary depending on things like your age and location. Your driving record also makes a big difference when it comes to rates.
Do You Need Auto Insurance USA?
Almost every state in the U.S. requires auto insurance if you own or drive a vehicle. Additionally, if you drive a leased vehicle or have an auto loan, your lender requires you to have auto insurance. While auto insurance might seem like an unnecessary, expensive cost, it is designed to protect you. If you’re in a car accident, it can provide you with the funds you need to pay for damages.
How to Find the Best Insurance Rates in the USA
Many factors go into calculating insurance rates in the U.S. Insurance companies might consider your:
- Marital status
- Driving record
Because of this, it’s important to shop around for prices. Insurance companies rate these factors differently, so shopping around can help you find the best rates.
How Are Insurance Rates Affected Following an Accident?
Your driving record is one of the biggest factors that goes into insurance rates. If you’re in a car accident, you can expect an increase in rates. A study by U.S. News found that drivers with one accident on their record pay, on average, $1872 per year. This is about 42 percent higher than drivers with no accident on their driving record. Also according to U.S. News, the best insurance providers for drivers who have an accident on their record is usually with:
- Travelers: Average annual rate of $1219
- State Farm: Average annual rate of $1404
- American Family Insurance: Average annual rate of $1656
- GEICO: Average annual rate of $1734
- Nationwide: Average annual rate of $1909
- Progressive: Average annual rate of $2236
- Farmers: Average annual rate of $2409
- Allstate: Average annual rate of $2514
These rates might be even higher if you have more than one accident on your record or other high-risk factors such as minimal driving experience. If you have an accident on your record, it can be helpful to request quotes from each of these providers and compare them with each other. Each insurance provider will calculate an accident’s effect on your rates differently.
How Does a DUI Affect Insurance Rates?
Having a DUI on your driving record is likely to cause the biggest increase. The Zebra found that drivers with a DUI pay, on average, $2111 per year. This is about a 60 percent increase when compared to drivers with a clean record. U.S. News lists the best insurance providers for drivers with a DUI as:
- State Farm: Average annual rate of $1568
- USAA: Average annual rate of $1661
- American Family: Average annual rate of $1714
- Progressive: Average annual rate of $1732
- Travelers: Average annual rate of $2023
- Farmers: Average annual rate of $2284
- Nationwide: Average annual rate of $2559
- Allstate: Average annual rate of $2624
- GEICO: Average annual rate of $2836
If you have more than one DUI on your record, you can expect even higher rates. While USAA might have one of the cheapest rates, it is only available to military members and families.
How Does Credit Score Affect Insurance Rates?
In some states, your credit score can also affect your insurance rates. Insurance companies tend to correlate higher credit scores with a lower risk of filing a claim. Credit scores are categorized as:
- Very poor: 300-579
- Fair: 580-669
- Good: 670-739
- Very good: 740-799
- Great: 800-850
Drivers with very poor credit scores might pay up to $1500 more than drivers with great credit. The best insurance provider for drivers with less-than-perfect credit is usually with Nationwide. You might also consider the following providers:
- Nationwide: Average six-month rate of $785
- GEICO: Average six-month rate of $903
- Farmers: Average six-month rate of $1179
- Progressive: Average six-month rate of $1181
- American Family: Average six-month rate of $1254
- USAA: Average six-month rate of $1382
- Travelers: Average six-month rate of $1426
- State Farm: Average six-month rate of $1481
- Allstate: Average six-month rate of $1577
- Liberty Mutual: Average six-month rate of $1921
Improving your credit score by even a few points can make a difference in your insurance rates. Paying down credit cards or carrying less debt can mean lower monthly insurance payments.
How Does Location Affect Insurance Costs?
A driver’s location can also affect insurance rates. Drivers who live in a no-fault auto insurance state can expect to pay more because insurance companies increase premiums to make up for larger numbers of uninsured or underinsured drivers. Additionally, some areas are at a higher risk of theft, vandalism, or auto accidents due to larger populations. States like Florida and California also have higher chances of weather-related damages. These are the average six-month rates based on state:
- Alabama: $648
- Alaska: $698
- Arizona: $708
- Arkansas: $851
- California: $912
- Colorado: $849
- Connecticut: $771
- Delaware: $808
- Florida: $1162
- Georgia: $769
- Hawaii: $540
- Idaho: $628
- Illinois: $642
- Indiana: $594
- Iowa: $575
- Kansas: $800
- Kentucky: $925
- Louisiana: $1152
- Maine: $550
- Maryland: $708
- Massachusetts: $651
- Michigan: $1267
- Minnesota: $699
- Mississippi: $750
- Missouri: $844
- Montana: $775
- Nebraska: $760
- Nevada: $872
- New Hampshire: $480
- New Jersey: $751
- New Mexico: $637
- New York: $846
- North Carolina: $505
- North Dakota: $661
- Ohio: $463
- Oklahoma: $773
- Oregon: $668
- Pennsylvania: $669
- Rhode Island: $937
- South Carolina: $733
- South Dakota: $720
- Tennessee: $629
- Texas: $749
- Utah: $657
- Vermont: $528
- Virginia: $513
- Washington: $604
- Washington D.C.: $713
- West Virginia: $715
- Wisconsin: $540
- Wyoming: $730
Your individual rates may be higher or lower than these state averages. The best way to get the most accurate prices based on your individual factors is to shop around.
Auto insurance is a requirement if you live in the U.S. and drive a vehicle. Choose the right coverage to ensure you have the protection you need.
Check this out if you need additional information, resources, or guidance on car insurance.
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