What car insurance coverage is right for you?

Alyssa DiCrasto on 2024-09-12

What car insurance coverage is right for you?

Last updated September 12, 2024

Picture of Written by <a href="https://rateretriever.com/about/katie-dee/"><span style="text-decoration: underline;">Katie Dee</span></a>

Written by Katie Dee

Picture of Edited by <a href="https://rateretriever.com/about/alyssa-dicrasto/"><span style="text-decoration: underline;">Alyssa DiCrasto</span></a>

Edited by Alyssa DiCrasto

Finding the coverage you need

When it comes to car insurance, finding the right coverage can feel overwhelming. With so many options, it’s important to make sure you’re adequately protected without overpaying for coverage you don’t need. Whether you’re a new driver or simply reassessing your current policy, choosing the right car insurance is about understanding your personal situation and risk factors.

To make the process easier, we’ve created a simple flowchart that guides you step-by-step toward the coverage that’s right for you. Just follow along, and by the end, you’ll have a clearer idea of what you need. Let’s get started!

Find cheap car insurance near you

Frequently asked

What factors affect your car insurance rates?

There are dozens of factors that affect car insurance rates. Some of the most notable factors are your location, age, gender, credit score, driving record, claim history, vehicle type, coverage limits, coverage types, and deductible. Additionally, the car insurance company you select can affect your car insurance premium.

Does your lifestyle affect your car insurance?

There are several lifestyle-related factors that can impact the cost of your auto insurance policy. For example, if you have a long commute to work or take road trips frequently, you might pay more for car insurance than someone who drives less often. Similarly, if you live in a city or urban area, your rate might be higher than someone who lives in a rural area. However, factors like your job, hobbies, or health don’t have any impact on your car insurance.

How does where you live influence the cost of auto insurance?

Where you live has a significant impact on the cost of your car insurance policy. Insurance companies look at things like the severe weather risks in your area, the rate of vehicle thefts in your neighborhood, the number of uninsured drivers in your location, and the cost of car repairs and labor. If you live in an area with few risks, you will probably pay less for car insurance.

About Rate Retriever

At Rate Retriever, our mission is to make the way you shop for insurance transparent and fair through user-friendly tools that respect your privacy and deliver reliable, comprehensive results.

So we took everything we hated about comparing insurance quotes online – the spam, the long questionnaires, the limited choices, the inaccuracy of quote prices – and threw it out the window, favoring a short form that more accurately estimates what you’ll pay at each of the top insurance providers near you.

Rate Retriever is an independent company that is not owned by an insurance provider, nor do we provide insurance ourselves. This independence allows us to be your free and impartial insurance research tool, helping you make the best decisions for your insurance needs.

We may earn a commission when you click one of the links or call one of the providers listed on our site; however, we do not allow our partnerships to influence which information we provide.

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How to become a car insurance agent in MI

Alyssa DiCrasto on 2024-03-05

Interested in becoming a licensed car insurance agent in Michigan? Learn about the education requirements, licensing process, cost, and more.

The unexpected impact of climate change in Texas: skyrocketing car insurance rates

Alyssa DiCrasto on 2024-02-27

The unexpected impact of climate change in Texas: skyrocketing car insurance rates

Written by Katie Dee

Edited by Alyssa DiCrasto

Published on 2024-02-27

Read time: 3 min

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Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

From record breaking heat waves to massive ice storms, Texas has been the location of 44% of all billion-dollar climate and weather-related disasters that took place in the United States between 1980 and 2022. As the rate of climate change continues to climb, instances of severe weather and natural disasters in the state will only increase. One unexpected consequence of this will be an increase in auto insurance rates.

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

Texas car insurance rates

According to Rate Retriever’s quarterly report, the average yearly premium for car insurance in Texas is $1,886, just under 4% more expensive than the national average. However, this amount varies depending on your zip code.

Currently, the cheapest zip code for car insurance in Texas is 76543 in Killeen with an average premium of $1,498 per year. Conversely, the most expensive zip code is 75224 in Dallas with an estimated annual premium of $2,399.

To determine your insurance rate, providers consider several factors, including the make and model of your vehicle, your age, your driving record, and your location. This information helps insurance companies determine how likely it is that you will file a claim, and climate change has caused heightened levels of risk in the Lone Star State.

Climate change and car insurance

The winter of 2023 brought Texas its largest ice storm on record. In the most affected areas, the storm brought upwards of 0.75 inches of ice and caused several blackouts across the state due to down powerlines. Additionally, millions of trees were damaged as their branches broke off and littered the road. Needless to say, this severely impacted driving conditions across the state.

On the other end of the spectrum, the summer of 2023 was the hottest in Texas’ recorded history, leading to over 300 heat related deaths in the state. Dangerously high temperatures like this can lead to slower cognition and, as a result, bad driving habits. All of this leads to an increased likelihood of being involved in an accident.

Car insurance companies will raise rates to better protect themselves against the increased frequency of claims that will inevitably come as a result of these weather extremes. However, all hope is not lost for Texas drivers. You are still in control of several factors impacting your car insurance rates, and there are numerous methods at your disposal to be sure you are getting the cheapest price possible.

Saving money on Texas car insurance

One of the most useful tips to be sure you never overpay for car insurance is to comparison shop. Your rates will look different from every insurance company due to specific guidelines each one sets forth. Researching what your premium will look like at several different insurance companies in your area will ensure that you are truly getting the lowest rate. Take our 30-second quiz to see rate estimates for providers near you.

Another method for saving money on Texas car insurance is to take a defensive driving course. Numerous car insurance companies such as Progressive and Nationwide offer discounts to drivers who take these online courses. Completing one of these courses serves as proof that you are up to date on safe driving practices and, therefore, less likely to file a claim.

Improving your credit score is another avenue to try and lower your car insurance rates. Research has shown that drivers with a low credit score are more likely to file a car insurance claim, and providers in most states take this into account when determining your premium. Consistently making on time payments on your credit card will help to raise your score and lower your car insurance premium.

Lastly, raising your deductible can help to cut down on your monthly payments. However, this might not be the smartest choice for every driver. Raising your deductible can help to save you money in the short term, but it also means you will be accepting more financial responsibility if you ever need to file an insurance claim. Consider this risk carefully before changing your deductible to be sure that you won’t regret the choice down the line.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Each state has its own minimum requirements on the type and amount of insurance needed. When you’re trying to determine what and how much car insurance you need, you can start by reviewing your state’s requirements.

Find out what’s required in your state

Once you review your state’s minimum requirements, you may find that you want additional coverage. For example, sometimes owners of new cars want comprehensive coverage to insure their car from natural disasters and vandalism, even though comprehensive coverage isn’t required by their state. To figure out what insurance you want, you can review the different types of insurance to decide what makes the most sense for your situation.

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

The biggest difference between Rate Retriever and other comparison sites is that we are a free and impartial research tool NOT an insurance marketplace. This means you can’t purchase a policy directly through RateRetriever.com, but you can use our tool to independently research your options and seamlessly connect with the provider you choose.

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

We like to think that Rate Retriever is your insurance companion, not just another insurance comparison site. Our values guide everything we do, which is why we strive to offer transparent, trustworthy insurance tools.

How can I get cheaper car insurance?

There are many ways you can try to get cheaper car insurance. The first is simply to get quotes from multiple providers. This will help you determine if you’re currently receiving the cheapest rates based on your needs and driver profile. Rate Retriever makes the comparison process easy.

Sometimes, the reason your car insurance is so expensive is due to your driver profile. For example, drivers under 20 years old usually pay more for insurance than more experienced drivers, and drivers with a recent at-fault accident or traffic violation typically pay more.

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Rate Retriever works with national and local insurance providers to provide our users with a seamless insurance shopping experience. We may earn a commission from our insurance provider partners when you click on a link, call, or purchase a policy from one of the providers listed on our site. That said, we’re committed to providing you with accurate, bias-free information, and we do not allow our partnerships to limit the results or influence the information we share with you.

We do not sell your personal information, charge you for using our tools, or sell you insurance policies. Additionally, should you choose to purchase a policy from one of our partners, the price you pay will not be adversely affected.

Read our full earnings disclosure

Factors That Impact Your Car Insurance Rate

Alyssa DiCrasto on 2024-02-08

Car insurance companies charge drivers differently, depending on their driver profile. Your driver profile is made up of a combination of many different factors including your demographics, where you live, and how you drive.

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Interested in becoming an insurance agent in Georgia? Learn about the requirements for getting an insurance license in Georgia and how much it costs.

Which gender pays more for car insurance?

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Males and females often pay different rates for car insurance. See average car insurance rates by gender and learn how to find the most affordable policy.

How adding a driver impacts your car insurance

Alyssa DiCrasto on 2023-12-18

How adding a driver impacts your car insurance

Last updated December 18, 2023

Written by Elizabeth Rivelli

Reviewed by Alyssa DiCrasto

There are several occasions when you need to add a second driver to your car insurance policy. For example, you might get married and combine policies with your new spouse, or add your child to your policy when they get a driver’s license. Adding a driver to your car insurance policy is a simple process, but it can cause your premium, or the price you pay for car insurance, to change.

Before you add a driver to your car insurance policy, there are a few things you should know. In this guide, we’ll explain when and how to add a driver to your insurance policy and share how much it costs to add a new driver to your car insurance.

Adding a driver to your car insurance policy

If you’re the only person listed on your car insurance policy, it’s possible to add more drivers. Most insurance companies allow up to four people on a single policy, whether the additional drivers are relatives or friends. Adding a new driver to your policy is fairly straightforward, and many insurers allow you to make this change online or through the company’s mobile app.

Who can I add to my car insurance policy?

In general, you can add anyone to your car insurance policy who lives in your household. You can add a spouse, children, extended family members, relatives, or friends, as long as they have a valid driver’s license. However, there is usually a limit to the number of people you can add to one policy.

In some states, you are legally required to add the people you live with to your car insurance policy. This includes roommates and family members who live at the same address. For example, if you and your spouse have your own insurance policies, you might have to add each other as an insured driver on your individual policies.

When do I need to add a driver to my car insurance policy?

You should add a driver to your policy as soon as that person needs to start driving your vehicle. So, for instance, once your child gets their learner’s permit, it’s a good idea to add them to your insurance policy, even if it’s not required. Similarly, you might want to add a boyfriend or girlfriend to your policy if you move in together and occasionally drive each other’s vehicles.

How to add a driver to my car insurance

Adding a new driver to your car insurance policy is pretty simple. You will need to contact your insurance provider to have them added, or use the online customer portal or mobile app. To add the driver, you will need to submit their name, date of birth, and driver’s license number. You might also have to disclose information about their driving record or claim history. Once the driver has been added, you will see your new rate if any changes were made.

How much does it cost to add a person to my car insurance?

The cost of adding a person to your car insurance policy depends on several factors, including the person’s age and driving record. Adding a young driver will have a bigger impact on your premium than adding an adult driver. If the new driver has multiple violations or accidents on their record, that could also cause your car insurance rate to increase significantly.

Before you add a person to your car insurance policy, it’s a good idea to get new car insurance quotes. You might find that a different company can offer a lower rate for your new policy. You can take our short quiz to see how much you can expect to pay for car insurance.

Find cheap car insurance near you

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How adding a spouse impacts car insurance rates

Adding a spouse to your car insurance policy usually has a minimal impact on your rate. In fact, you can often save money by combining car insurance policies with your husband or wife.

Married couples with their own individual car insurance policies will spend an average of $3,645 per year. When married couples are both insured on the same policy, the average premium is $2,797 per year for two vehicles. When a couple shares one car, the premium is much lower at $1,716 per year.

How adding a teen driver impacts car insurance rates

Adding a teen driver usually has the biggest impact on your car insurance rate. Young drivers lack experience behind the wheel and have the highest accident rate of any age group. However, adding a teen to your car insurance policy is typically cheaper than purchasing a separate insurance policy for your teen.

According to our data, the average premium for a parent alone is $1,693 per year and the average rate for a teen on their own policy is $7,401 per year. When a parent adds a teen to their existing insurance policy and shares one vehicle, the average premium is $4,189 per year. That is an average savings of 36% compared to having two separate policies.

Frequently asked

Who needs to be covered by my car insurance policy?

Any drivers that live in your household should be listed on your car insurance policy. This includes family members, like spouses, children, and parents, as well as roommates. You should also list people who drive your car occasionally, like a co-worker or relative that doesn’t live with you.

When would I need to remove a driver from my car insurance policy?

You can remove a driver from your car insurance policy if they move out of your house or no longer drive your vehicle. For example, if your child moves to a new state for college and gets their own car insurance policy, you could remove them from your policy.

Does car insurance follow the car or the driver?

In general, car insurance follows the car, not the driver. The same coverages apply when you drive the vehicle and when other people drive it. This also goes for people who borrow your vehicle but aren’t listed on your policy as an insured driver.

Should my roommate be listed on my car insurance policy?

If you have a roommate but they never drive your vehicle, you probably don’t need to add them to your insurance policy. However, if your roommate drives your vehicle occasionally, even a few times per year, it’s a good idea to add them. Some states and insurance companies require you to add all drivers living at your address, so ask your insurer about the laws where you live.

Can I add my boyfriend or girlfriend to my car insurance?

Yes, you can add a boyfriend or girlfriend to your car insurance policy if you live together or share a vehicle. If you eventually get married, you could combine the two insurance policies and potentially qualify for a lower insurance premium.

About Rate Retriever

At Rate Retriever, our mission is to make the way you shop for insurance transparent and fair through user-friendly tools that respect your privacy and deliver reliable, comprehensive results.

We may earn a commission when you click one of the links or call one of the providers listed on our site; however, we do not allow our partnerships to influence which information we provide.

Share this article

Life events that impact your car insurance rates

Alyssa DiCrasto on 2023-12-15

Life events that impact your car insurance rates

Last updated December 15, 2023

Written by Elizabeth Rivelli

Reviewed by Alyssa DiCrasto

The cost of car insurance is personalized to each individual. The price you’ll pay for car insurance depends on a variety of different factors, like your age, location, and credit score. Additionally, certain life events can impact your car insurance rate. In this article, we’ll look at some of the life events that might cause your car insurance premium to increase or decrease.

What impacts car insurance rates?

When you apply for a car insurance policy, the insurance company uses a variety of rating factors to determine your unique premium.

Personal rating factors include things like:

Your age
Credit score
Vehicle type
Driving record
Claim history

Policy-related factors include things like:

Coverage limits
Deductibles
Length of the policy term

Another factor that impacts the cost of car insurance is the insurance company that underwrites your policy. Each insurance company charges different rates for the same types and amounts of coverage. As a result, you might find that one company can offer you a much lower rate than a competitor for the same policy.

How car insurance companies determine your rates

Car insurance companies look at many different factors to determine your premium. These factors are used to gauge the amount of risk you bring to the company before it agrees to cover you.

For example, if you live in a location with a high risk of hurricanes, there’s a bigger chance that your vehicle will be damaged by flooding and you will file a claim. As a result, you will likely pay a higher rate for car insurance than a driver who lives in a lower-risk area.

Additionally, drivers who have been involved in multiple accidents or have gotten several speeding tickets are riskier to insure than drivers with a clean record. Therefore, if you have multiple violations, you can expect to pay a higher rate than a driver with a clean record.

To find the most affordable car insurance rate for your situation, it’s a good idea to get quotes from multiple car insurance companies. You can also take our short quiz to see how much you can expect to pay for car insurance at each of the top companies near you.

Find cheap car insurance near you

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Life events that impact your car insurance rates

There are many personal- and policy-related factors that can affect your car insurance premium. However, certain life events can also impact your rate. Here are some of the biggest life events that may cause your premium to change.

1. Adding a teen driver to your policy

Your car insurance premium will change when you add a young driver to your car insurance policy. For instance, if your child gets their driver’s license and you add them to your policy, your premium will probably increase significantly due to their lack of experience behind the wheel.

Based on our analysis of recent rate data, the average parent with a teen on their policy and one shared vehicle will pay around 60% more than if they didn’t have the teen on their policy. A parent with a teen and two vehicles on their policy can expect to pay around 71% more than they would on their own.

State	Teen's Policy	Parent's Policy	Combined
Alabama	8,588	1,531	4,248
Alaska	6,722	1,524	4,062
Arizona	8,866	1,616	4,700
Arkansas	8,459	1,702	4,101
California	5,144	1,923	4,029
Colorado	10,124	1,848	4,239
Connecticut	10,435	1,994	4,942
Delaware	14,276	2,297	5,573
Florida	11,851	2,300	6,135
Georgia	10,961	1,781	5,109
Hawaii	1,701	1,255	1,263
Idaho	6,314	1,072	2,959
Illinois	8,344	1,652	4,166
Indiana	5,906	1,335	3,335
Iowa	6,025	1,390	3,300
Kansas	8,713	1,771	4,114
Kentucky	9,611	1,861	4,942
Louisiana	12,724	2,780	7,497
Maine	5,074	1,186	2,934
Maryland	10,951	2,159	5,581
Massachusetts	6,079	1,647	3,627
Michigan	9,433	2,406	5,799
Minnesota	7,199	1,796	4,551
Mississippi	7,787	1,486	3,920
Missouri	9,264	2,004	4,950
Montana	7,143	1,384	3,008
Nebraska	6,894	1,693	3,885
Nevada	12,800	2,136	6,701
New Hampshire	6,315	1,280	3,259
New Jersey	12,246	2,087	5,676
New Mexico	7,604	1,450	3,591
New York	10,545	3,334	6,903
North Carolina	4,918	1,525	3,172
North Dakota	7,281	1,431	3,427
Ohio	5,703	1,184	2,991
Oklahoma	11,037	1,974	4,412
Oregon	7,873	1,417	3,892
Pennsylvania	7,192	1,863	4,821
Rhode Island	11,605	1,908	5,718
South Carolina	6,972	1,579	4,791
South Dakota	8,051	1,916	4,093
Tennessee	7,514	1,522	4,285
Texas	9,313	2,068	5,204
Utah	10,063	1,582	3,885
Vermont	4,647	1,114	2,958
Virginia	8,420	1,517	4,678
Washington	7,774	1,467	3,735
Washington DC	9,225	1,940	4,399
West Virginia	7,725	1,450	4,402
Wisconsin	6,646	1,364	3,427
Wyoming	4,450	1,178	3,270

2. Adding or removing a spouse from your policy

Getting married or divorced often has an impact on your car insurance rate. For example, our data shows that married couples who share a vehicle and one insurance policy can save up to 53% on their insurance costs while married couples who have two vehicles will save up to 23% on average.

If you get divorced and remove your spouse from your car insurance policy, it’s possible that your rate could increase. The national average cost of car insurance for one individual is $1,824 per year, which is slightly higher than the average rate for married couples.

3. Moving to a new city or state

Your location is one of the biggest factors that can affect your car insurance premium. Factors like weather risks, vehicle theft rates, accident rates, and uninsured driver rates can all impact the amount you pay for auto insurance in your area. If you move to a new city or state, your car insurance premium might change.

Our average rate data shows that Vermont is the cheapest state for car insurance, with Vermont drivers paying almost 41% less than the national average. We found that Idaho, Maine, Ohio, and Wyoming have the next lowest average premiums.

Using the same data, we determined that the most expensive state for car insurance is New York, with an average rate of $3,061 per year (67.8% more than the national average). The other states with the most expensive rates include Louisiana, Florida, New Jersey, and Delaware.

4. Buying a house

If you recently purchased a home, you might qualify for a lower car insurance premium. Homeowners often pay slightly less for auto insurance than people who rent. Depending on your insurer, homeowner status might be used as a rating factor or a discount opportunity. Either way, you should see your premium decrease after buying a home, assuming you have good credit, no recent claims, and a clean driving record.

5. Buying a second car

When you insure multiple vehicles on the same insurance policy, your insurance company takes on additional risk. If you purchase a second vehicle, you will most likely see your car insurance premium go up. This is especially true if the second vehicle is brand-new or has a very high value.

However, there are ways to minimize your rate increase after purchasing a second car. Many insurance companies offer a multi-car discount, which can help you save some money on your total premium. If you plan to drive the second vehicle less often than your main car, you could also get a usage-based car insurance policy to lower your insurance costs.

6. Changes to your credit score

In almost every state, car insurance companies use credit-based insurance scores to calculate your premium. Drivers with good credit usually pay lower rates than drivers with poor credit. If there have been recent changes to your credit score, it will probably impact your premium when your policy renews.

For example, if you had fair credit but you were able to boost your score into the good credit category, your insurance company may reduce your premium. Conversely, if you had excellent credit but it dropped into the fair credit category, you might see your premium increase.

According to our rate data, here are the average annual rates for drivers based on credit tier in each state:

State	Poor	Good	Excellent
Alabama	3,112	1,674	1,408
Alaska	2,456	1,617	1,288
Arizona	3,304	1,799	1,473
Arkansas	3,284	1,914	1,556
California		1,923
Colorado	3,570	2,001	1,614
Connecticut	4,699	2,145	1,396
Delaware	4,325	2,398	1,997
Florida	3,928	2,627	2,301
Georgia	3,191	1,897	1,485
Hawaii		1,325
Idaho	2,002	1,190	1,045
Illinois	3,181	1,782	1,432
Indiana	2,699	1,483	1,182
Iowa	2,706	1,512	1,235
Kansas	3,485	1,919	1,606
Kentucky	4,399	2,102	1,713
Louisiana	5,789	3,129	2,396
Maine	2,498	1,286	1,062
Maryland	4,592	2,301	1,973
Massachusetts		1,648
Michigan	5,843	2,501	1,990
Minnesota	4,096	1,896	1,523
Mississippi	2,791	1,573	1,356
Missouri	4,270	2,221	1,768
Montana	2,262	1,556	1,350
Nebraska	3,281	1,794	1,461
Nevada	3,678	2,444	2,110
New Hampshire	2,987	1,421	1,157
New Jersey	5,350	2,360	1,760
New Mexico	2,441	1,622	1,370
New York	7,878	3,533	2,905
North Carolina	2,407	1,542	1,404
North Dakota	2,842	1,602	1,238
Ohio	2,540	1,294	1,048
Oklahoma	3,558	2,181	1,875
Oregon	2,870	1,564	1,303
Pennsylvania	3,726	2,015	1,661
Rhode Island	4,042	2,005	1,651
South Carolina	3,773	1,704	1,339
South Dakota	3,987	2,023	1,667
Tennessee	3,074	1,669	1,331
Texas	4,082	2,280	1,832
Utah	3,196	1,871	1,547
Vermont	2,295	1,186	1,027
Virginia	3,682	1,636	1,341
Washington	1,877	1,553	1,469
Washington DC	3,547	2,022	1,616
West Virginia	3,118	1,628	1,293
Wisconsin	2,358	1,472	1,215
Wyoming	2,012	1,172	1,060

7. Retirement

Entering retirement won’t cause any direct changes to your car insurance premium. However, retiring could impact your rate in a few ways. For instance, if you’re driving less often during retirement, you could qualify for a low mileage discount, which would reduce your premium. You could also switch to a pay-per-mile policy to save money on your insurance.

While you might qualify for initial savings during retirement, it’s possible that your premium will increase as you get older. After age 70, car insurance rates tend to go up slightly every year.

Frequently asked

What factors affect your car insurance rates?

Does your lifestyle affect your car insurance?

How does where you live influence the cost of auto insurance?

About Rate Retriever

At Rate Retriever, our mission is to make the way you shop for insurance transparent and fair through user-friendly tools that respect your privacy and deliver reliable, comprehensive results.

We may earn a commission when you click one of the links or call one of the providers listed on our site; however, we do not allow our partnerships to influence which information we provide.

Share this article

Drivers in Michigan pay over 20% more than the national average for car insurance

Alyssa DiCrasto on 2023-12-11

Drivers in Michigan pay over 20% more than the national average for car insurance

Written by Katie Dee

Edited by Alyssa DiCrasto

Published on 2023-12-11

Read time: 3 min

Back in 2019, Michigan underwent an auto insurance reform that promised to save drivers money on their yearly premiums by allowing individuals to opt out of unlimited lifetime personal injury protection (PIP). Now, 4 years later, Michigan car insurance is still 22.1% more expensive than the national average.

Car insurance rates are highly personalized and depend on several factors, including your driving history, age, and – of course– the state you live in. According to Rate Retriever’s Auto Insurance Rates Quarterly Update, on average, drivers in Michigan pay $2,228 per year for their car insurance premiums. However, some drivers in the state face rates as high as $5,739 annually based on their unique driver profile.

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What are the regulations for car insurance in Michigan?

One important thing to note about car insurance in this state is that gender is not considered in setting rates. Michigan is one of only 5 states in the U.S. where it is prohibited for insurers to take a policyholder’s gender into account while determining their premium.

In the state of Michigan, the minimum amount of car insurance coverage you need is at least $50,000 in bodily injury liability per person per accident, $100,000 in bodily injury per accident, and $10,000 in property damage liability per accident. Drivers can also get additional coverage, such as comprehensive, collision, and uninsured or underinsured motorist coverage.

The coverage level you choose will have an impact on the price you pay. On average, drivers with a minimum coverage car insurance policy pay 56% less than those with premium full coverage while those with a standard full coverage policy with slightly lower limits pay around 7% more.

The impact of credit score on car insurance in Michigan

According to Rate Retriever’s data, credit score plays a huge role in how much you will pay for Michigan car insurance. Drivers with poor credit are at risk of paying up to $5,739 per year for car insurance. This is 158% more than those with good credit.

Furthermore, drivers with fair credit pay an average of 29% more than those with good credit. That is a difference of $656 per year on average for an annual premium of $2,884. Conversely, having an excellent credit score is a good way to save money on your Michigan car insurance. These drivers save an average of 21% per year on their premiums with an annual rate of $1,754.

However, in Michigan, insurance companies are not permitted to deny coverage or refuse to write or renew a policy based on credit score.

How your zip code is affecting your rates

Zip code is another major factor used to determine rates. Currently, the most expensive zip code in Michigan to insure your vehicle is 48205 in Detroit. This area has an average annual premium of $4,916. There are several reasons why car insurance might be pricier in this area of the state. Firstly, Detroit has a high population density of 4,606 people per square mile.

Densely populated areas like this bring a higher likelihood of car accidents, increasing the amount of risk that the policy introduces to an insurer. Additionally, this zip code brings with it an increased risk of car theft. According to News Channel 7, car theft in Detroit went up by 45% in 2022, further increasing the risk accrued by car insurance companies when they cover vehicles in this area.

The cheapest zip code in Michigan is 49456. The average annual premium for this area is $1,644 and it is located in Spring Lake. Being a more suburban neighborhood than Detroit, car insurance companies likely set lower rates for this zip code because there is less risk associated with it. With a population density of just over 900 people per square mile and a very low rate of car theft, drivers in Spring Lake are less likely to file a claim.

How to save money on car insurance in Michigan

Even with an annual premium almost 23% above the national average, there are still ways you can save money on car insurance in Michigan. One of the easiest ways to do this is to comparison shop and see which insurer in your area has the lowest rates for you. Take our short quiz to compare and find savings fast.

Another method to save money is to improve your credit score. Since those with poor credit pay over 150% more while those with excellent scores pay about 20% less for car insurance, raising your score is a good way to save money on your premium. The best way to do this is to be sure that you are paying your bills on time and that you do not have any outstanding payments due.

Next, raising your deductible can help to minimize your monthly car insurance rates. It is important to note that by doing this, you are accepting more financial responsibility if you ever have to file a claim. This means that while this will save you money in the short term, you may end up paying more in the long term. Keep this in mind before deciding to raise your deductible as it may not be the best option for every driver.

Completing a safe driving course is another way to cut down on costs. Several major car insurance companies offer discounts for policyholders who complete defensive driving courses because brushing up on your driver’s education makes you less of a risk to insure.

Besides all the options above, being a safe driver is the best way to decrease your annual premium. When car insurance companies determine the rate they would charge you, they will consider your driving record first and foremost. If you have a track record of safe habits, your annual premium will reflect that.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Find out what’s required in your state

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

How can I get cheaper car insurance?

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Read our full earnings disclosure

Auto Insurance Rates Quarterly Update

Alyssa DiCrasto on 2023-10-05

Average Auto Insurance Rates across America

Quarterly Update | Q3, 2023

How geography, age, vehicle, gender, credit score, coverage level, and adding a driver impacts your insurance rates in each state.

For reporters >

Last Updated: July, 2023

Data included in the report:

We analyzed carrier rates across ~33,000 zip codes in the United States using public rate filings obtained by analytics company First Interpreter. We then modified our base profile to show how different factors impacted car insurance rates, including the following:

National average cost of car insurance
Average cost of car insurance by state and city
Car insurance by factor: age, gender, credit score
Car insurance by coverage level
Car insurance by vehicle
How adding a driver to your policy impacts your rates

National average cost of car insurance in the US: $1,824 a year

Cheapest state for car insurance: Vermont

The average cost of car insurance in Vermont is $1,078 per year, which is 40.9% less than the national average.

The Vermont zip code with the highest insurance rates is Killington, VT ($1,129/yr) while the least expensive is Essex Junction, VT ($1,008/yr).

Other cheap states for car insurance: Idaho, Maine, Ohio, Wyoming.

Most expensive state for car insurance: New York

The average cost of car insurance in New York is $3,061 per year, which is 67.8% more than the national average.

The New York zip code with the highest insurance rates is Brooklyn, NY ($5,512/yr) while the least expensive is Conklin, NY ($1,160/yr).

Other expensive states for car insurance: Louisiana, Florida, New Jersey, Delaware.

See the Complete List of States

Download the Q3 report to see the average cost of insurance and how each factor impacts rates in every state

Car insurance rates by factor

Age and car insurance cost

Teen and young adult drivers will pay the most for car insurance, with their rates stabilizing around age 25. Most drivers will have their lowest car insurance rates between ages 45-65. Seniors age 70 and older may see a small increase in their rates each year. This trendline is the same across most states.

Gender: male drivers pay more

This will vary state to state, but on average males pay more than female drivers for car insurance. For example, in Alaska, females pay 3% less than males while in Utah, females pay 5% more. The use of gender as a rating factor is limited or banned in California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania.

Credit Score and car insurance cost

On average, those with excellent credit pay 17% less than those with good credit, and drivers with poor credit pay up to 84% more.

	Avg Annual Premium	Impact on Cost	% Impact
Good Credit	$1,824
Excellent Credit	$1,512	-$312	-17%
Fair Credit	$2,243	$419	+23%
Poor Credit	$3,358	$1,534	+84%

The impact of credit score on insurance rates also varies by state. For example, in Connecticut drivers with a poor credit rating pay about double what drivers with good credit pay while drivers with excellent credit pay 31% less.

California, Hawaii, and Massachusetts prohibit the use of credit-based insurance scores. In Maryland and Michigan, the role of credit score in insurance rates is limited.

Car insurance by coverage level

The amount of coverage a policy provides impacts the price of car insurance. On average, a policy with the legal minimum coverage saves drivers 60%. However, most drivers want a full coverage policy that covers their own property in a covered incident.

For a policy with 100/300/100 and a $500 deductible, the average annual premium is $1,824. When the limits are lowered to 50/100/50 with a $500 deductible, drivers only save around $10 a year on average. This suggests that lowering your coverage does not always save you money.

This also varies based on location, especially because the legal minimum coverage is different for each state. Download the quarterly report to see how coverage levels impact premiums in your state.

Car insurance by vehicle

The cost of car insurance depends on the vehicle’s make, model, year, and trim level. SUVs, minivans, and trucks tend to be cheaper to insure than sedans, sports cars, and luxury vehicles. Older vehicles and vehicles with lower trim levels also tend to be cheaper to insure than new vehicles or vehicles with additional features and value.

For the base models of the 100 most popular 2023 vehicles, the average cost of car insurance is $2,129 a year.

Cheapest vehicle to insure: Subaru Outback

The average cost of car insurance for a 2023 Subaru Outback is $1,737 per year, which is 18% less than the average 2023 vehicle.

Other inexpensive vehicles: Subaru Forester, Mazda CX-5, and Volkswagen Tiguan.

Most expensive vehicle to insure: Tesla Model S

The average cost of car insurance for a 2023 Tesla Model S is $4,048 per year, which is 90% more than the average 2023 vehicle.

Other expensive vehicles to insure: Tesla Model Y, Dodge Charger, and Tesla Model 3.

See the Complete List of Vehicles

Download the Q3 report to see the average cost of insurance for each of most popular 2023 vehicle models

How adding a driver to your policy impacts your rates

Getting married and car insurance

On average, married couples save 23% on their car insurance when they combine their policies. If they share a vehicle, their savings reach up to 53%.

	Avg Annual Premium	Impact on Cost	% Impact
Married couple; separate policies	$3,645
Married couple; joint policy (2 vehicles)	$2,797	-$848	-23%
Married couple ; joint policy (1 vehicle)	$1,716	-$1,929	-53%

Covering a teenage driver

For most parents, adding a teenager to their existing car insurance policy will be cheaper than purchasing a separate policy for the teenager. In fact, a parent that shares their vehicle with their teenager will save 54% when they add the teen to their policy rather than purchasing a separate policy for the teen driver. When the teen has their own vehicle, the pair will save 36% with a shared policy.

	Avg Annual Premium	Impact on Cost	% Impact
Parent Only	$1,693
Teen Only	$7,401
Parent + Teen (1 vehicle)	$4,189	-$4,905	-54%
Parent + Teen (2 vehicles)	$5,823	-$3,271	-36%

About the Auto Insurance Rates Report

Rate Retriever is the go-to destination for comparing car insurance rates from top providers. Our super simple tool helps drivers find savings in just 30 seconds by comparing the cost of car insurance at companies near them. It’s free and no sign-up is required.

Rate Retriever estimates rates based on public rate filings obtained by analytics company First Interpreter. This data comes from the rating plans insurance carriers submit to each state’s department of insurance.

For this report, we analyzed carrier rates across ~33,000 zip codes in the United States. Calculations were weighted by each zip code’s population for accuracy. Data is shown on maps by county for simpler visualization. The Geography table for each state highlights popular cities (we picked a single zip in each) to show how location impacts policy cost. We also included the highest and lowest rated zips in each state.

Methodology

Our base profile is a 35-year-old single male with a clean driving record and good credit score, driving a 2022 RAV4. We modify this profile by sex, credit score, age, marital status, homeowner status, and vehicle model to produce the data in this report.

Our base profile has a premium full coverage policy with the following limits:

Bodily injury liability: $100,000 per person/$300,000 per accident
Property damage liability: $100,000 per accident
Comprehensive/Collision: $500 deductible

These are sample rates and should be used for comparative purposes only.

Using the data

As we strive to be the most trusted resource for comparing insurance rates, we invite you to explore our findings, and should you choose to reference them, kindly provide proper attribution to “Rate Retriever” or “RateRetriever.com” and include a link to this page or rateretriever.com for more information.

For any inquiries, assistance, or additional data, feel free to reach out to us at [email protected]. We are able to provide local data for any of the factors analyzed in this report.

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How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?

How adding a driver impacts your car insurance

Adding a driver to your car insurance policy

Who can I add to my car insurance policy?

When do I need to add a driver to my car insurance policy?

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How much does it cost to add a person to my car insurance?

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How adding a spouse impacts car insurance rates

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Life events that impact your car insurance rates

What impacts car insurance rates?

How car insurance companies determine your rates

Find cheap car insurance near you

Life events that impact your car insurance rates

1. Adding a teen driver to your policy

2. Adding or removing a spouse from your policy

3. Moving to a new city or state

4. Buying a house

5. Buying a second car

6. Changes to your credit score

7. Retirement

Frequently asked

What factors affect your car insurance rates?

Does your lifestyle affect your car insurance?

How does where you live influence the cost of auto insurance?

About Rate Retriever

Drivers in Michigan pay over 20% more than the national average for car insurance

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What are the regulations for car insurance in Michigan?

The impact of credit score on car insurance in Michigan

How your zip code is affecting your rates

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Frequently asked

How does the insurance company determine my rate?

How do I switch my car insurance?

How much car insurance do I need?

How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?

Average Auto Insurance Rates across America

Quarterly Update | Q3, 2023

Data included in the report:

Cheapest state for car insurance: Vermont

Most expensive state for car insurance: New York

See the Complete List of States

Car insurance rates by factor