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Estimating car insurance costs

Are you paying too much for car insurance? It's a question most drivers ask themselves. Knowing how to properly estimate how much you should be paying can help you when you're on the hunt for a new car insurance policy. Along with The Zebra's car insurance cost calculator tool above, we've also compiled the following guide and other resources to help in your search for fair car insurance rates.

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Key takeaways
  • Your rates can vary by location, driving history, and the car you drive
  • The average monthly cost for car insurance in the U.S. is about $124
  • Every insurer has its own underwriting process, meaning quotes will vary widely from one company to another
  • To get the best rates and coverage, compare car insurance quotes from multiple companies

How to calculate how much car insurance coverage you need

If you're looking for a new car insurance policy, it's important to understand the various coverage components that go into an insurance policy.

Comprehensive and collision coverages are considered optional coverage types, though many lenders or leasing companies may require them. Most insurance companies offer the ability to build a policy that suits your financial situation and driving needs. 

Comprehensive and collision coverage overview

Both of these coverages protect your vehicle from physical damage. Your collision coverage protects your vehicle if you collide with another car or fixed object whereas your comprehensive coverage protects your vehicle from weather-related incidents, animals, or vandalism. When paired together, these coverages are often collectively known as full coverage.

These coverages are not required by state law but can be required if you’re leasing or financing a vehicle. Both are also subject to a deductible — what you pay prior to your insurance company reimbursing you for any damage.

Learn more about comprehensive and collision coverages.

Underinsured/uninsured motorist coverage

Uninsured and underinsured coverage pays for damages in the event the at-fault driver in a collision doesn't have insurance — or doesn't have enough insurance — to cover the damages inflicted. Underinsured and uninsured coverage usually falls into one of two buckets:

  • Uninsured property damage insurance coverage: Coverage for a vehicle in the event of monetary damages.
  • Uninsured bodily injury insurance coverage: Coverage for peoples' medical bills and other fees if bodily injury is sustained. 

Learn more about uninsured and underinsured coverage.


How car insurance premiums are calculated

Every car insurance company looks at a driver's complete profile to set the policy's rates. A driver's profile includes several factors, some of which are in their control: maintaining a good driving record or driving an affordable car to insure

 

Driving profiles and insurance rates

The amount a driver pays for insurance is based on several factors. These considerations, including location, age, gender, marital status, credit score, vehicle, and auto insurance and driving history, constitute the bedrock of a car insurance rate. The less risk posed by a client to an insurance provider, the lower their premium will be.

Guide to getting car insurance quotes


The Zebra has compiled resources to help you find car insurance quotes from the top companies in the country. Review this guide to car insurance quotes for more information on quotes and finding a policy.

 

Demographics and auto insurance rates

Insurance companies also take into consideration applicants' age, gender, credit score, marital status and homeownership status. Insurers use this information in an attempt to understand the risk posed by a client in order to assign an insurance rate.

Location and car insurance rates

Auto insurance is regulated by each U.S. state and priced based on the ZIP code in which a driver resides. If a state requires its drivers' basic minimum coverage to be high, its residents may face higher insurance costs.

This is one reason car insurance in Michigan is so expensive. Because Michigan is a no-fault state with high PIP insurance requirements, residents are forced to pay more for auto insurance than are drivers in other states. At the ZIP code level, higher rates of claims could lead to a pricier car insurance premium, as an insurance company adjusts for the increased likelihood of accidents and the greater probability of claims payouts.

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Insurance history and insurance pricing

Insurance companies prefer to insure drivers with reliable insurance histories. A lacking or incomplete insurance record can be a red flag to an insurance company. Insurance companies see drivers with a long history of high insurance limits as financially responsible, and therefore a lower risk than a driver without a positive insurance history.


FAQs

How are car insurance rates calculated? Chevron down icon

An insurance company looks at a driver's complete profile to set the policy's rates. A driver's profile includes several factors, some of which are in their control: maintaining a good driving record or driving an affordable car to insure.

How much will my car insurance be? Chevron down icon

Your car insurance premium is based on a number of personal and geographical factors. Also, every car insurance quote will vary from one insurer to another because of differences in underwriting. The best way to find out how much your insurance will be is to use a car insurance calculator tool or to simply get free quotes from multiple companies.

Is $100 a month expensive for car insurance? Chevron down icon

The average cost of car insurance is $124 per month, making $100 a month less than average. Still, the answer depends on the type of coverage that you are getting. $100 for liability coverage alone would be considered expensive, but for a full-coverage policy it is very affordable.

How does a driver's record influence insurance rates? Chevron down icon

The amount a driver pays for insurance is based on several factors. These considerations, including location, age, gender, marital status, credit score, vehicle, and auto insurance and driving history, constitute the bedrock of a car insurance rate.

How does a driver's location impact insurance rates? Chevron down icon

Auto insurance is regulated by each U.S. state and priced based on the ZIP code in which a driver resides. If a state requires its drivers' basic minimum coverage to be high, its drivers may face higher insurance costs.


How to calculate car insurance rates

Remember that car insurance estimator tools are good for getting a rough idea of what you should be paying, but your final rates will likely vary. For this reason, it's a good idea to cast a wide net and get more accurate quotes from as many companies as possible. The Zebra's goal is to match you with the best insurance coverage: an auto policy that suits your financial situation and your coverage needs.

The Zebra offers more options than your average insurance agent, which can come in handy if you’re seeking insurance savings. The more insurance companies you research, the more you save and the better coverage you find. If you want to find the best coverage for your money, look no further than The Zebra's car insurance calculator. Let us help you out — by using our auto insurance calculator, you can compare rates from leading companies in order to make sure you're getting the best rate. And you don't even have to leave your couch.

Compare car insurance quotes and find the right coverage today.

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Kristine Lee
Kristine LeeManager, Content and Data

Kristine is a licensed insurance agent who joined The Zebra in 2019 as an in-house content researcher and writer.

She is an authority on all things insurance and covers the ins and outs of auto, home, life and renters insurance. Her specialty is in providing data-backed insights and information to help insurance shoppers make informed decisions.

Kristine's insurance expertise and research have been cited by publications such as CNBC, Car and Driver, Business Insider, Yahoo!, The Balance, Nationwide and Elephant.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.

  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.

  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.

  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.