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Why is car insurance so expensive?

Put the brakes on your high insurance premium by knowing what drives up your rates.

Updated

Fact checked

Expensive car insurance could be caused by things you can control like the car you drive and your mileage. On the flip side, how much you pay can be influenced by things you can’t change like your age and the state you live in. Find out if you qualify for discounts and what you can do to lower your rate.

Reasons why car insurance is so expensive

If your insurance bill is setting you back more than you’d like, a few factors could be driving up your rate. Some of them you can’t help, such as your age or past tickets, and others you can work on to get a better deal.

You only focus on discounts.

While car insurance discounts help cut costs, you can swing too far and end up paying more in the long run by choosing an insurer that just has more discounts you qualify for. Check quotes carefully, since you may get a better price from a company that doesn’t offer as many discounts.

You’re 25 or younger.

Statistically, newbie drivers under age 25 get into more accidents than their more seasoned counterparts. Generally, you’ll see steep savings into the thousands when you turn 18, 22 and 25. Hitting one of those age milestones is a good time to shop for cheaper quotes.

You drive a lot.

If you drive more than 15,000 miles a year or your car has ventured across the country with you, you might have racked up higher mileage than other drivers. And while that makes you more experienced behind the wheel, it also means you have more chances for an accident. Picking a shorter commute or getting a remote job could help lower your insurance rates or qualify for a low mileage discount.

Your state has high insurance requirements.

Every state has different insurance requirements for coverage types and limits. For example, some states require only liability, while others add underinsured motorist or personal injury protection. Also, if your state has no-fault laws that let drivers cover their own liability damage, you’ll likely have high requirements and a more expensive premium.

Your coverage is high.

Just like having high requirements leads to higher rates, you also might prefer wide damage protection. Or you might need extra coverage because your car’s loan or lease contract stipulates full coverage. In either case, expect your cost to go up as you add more coverage.

You’ve had a lapse in coverage.

When you fail to stay legal with continuous car insurance, your rates might jump up. Even if you meant to keep coverage, your insurance company sees a lapse as negligent or risky behavior, which could translate into risky driving. The best way to avoid this is to keep at least minimum liability coverage and to make sure you cancel insurance the right way instead of letting insurance lapse.

You have poor credit.

A low credit score could affect your rates more than you think. This is because insurance companies find that drivers with poor credit tend to file more claims. You could save up to $1,000 by improving your credit score 100 points. But drivers living in California, Hawaii and Massachusetts bypass this factor altogether, since these states bar insurers from using credit at all.

You’ve had a few accidents or tickets.

Any ticket or at-fault accident can bump up your premium significantly, from a full-force collision to a minor fender-bender. Two minor accidents might cause a small increase, while one or more moderate, at-fault collisions could pile a hefty surcharge on to your premium. Even a speeding ticket can raise your insurance rates.

Your car is expensive or really old.

Your car’s make, model and value has an impact on your premium because it could cost your insurer more money to repair after an accident or require special repair knowledge or replacement parts. On the flip side, an old clunker might also spike your rates if it doesn’t include as much safety tech, antitheft features or universal parts as other cars.

You skip out on bundling.

Renters, homeowners, specialty lines, umbrella and other types of insurance can typically be bundled with car insurance. By getting policies with the same company, you can save 15% or more. Plus it comes with the added benefit of potentially only having to pay a single deductible in the event of a disaster.

You let your policy auto renew.

Not shopping around when it comes close to renewal time means you’re likely missing out on big savings. Even without claims, your premiums can increase overtime because of something called price optimization. By getting quotes from other companies, you can likely cut down your car insurance costs by $500 annually.

You’re not married.

Couples tend to save even more on insurance than singles. Specifically, men who get married tend to save more. On average, a newlywed man will save 10% on car insurance rates. The reason for the savings? Married people tend to get in fewer accidents. Cheap car insurance may not be a great reason to get married, but it could explain why your rates are higher if you’re single.

Find a cheaper car insurance policy

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
Progressive
Optional
30%
All 50 states
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
The AARP Auto Insurance Program from The Hartford
Optional
Yes
All 50 states & DC
Drivers over age 50 can enjoy low rates and perks designed for mature drivers, plus freebies and AARP member perks like free replacement cost coverage.
Allstate
13%
All 50 states
Your dedicated agent can help you find the best savings with multiple discounts and rewards programs.
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Bottom line

Car insurance rates vary a lot based on your driving record, age and characteristics of your car. If a factor increases your accident risk or could cost more in insurance payouts, you might see a higher premium than you’d prefer. No matter what’s affecting your rates, you can shop around for car insurance quotes and look for the best value available.

Frequently asked questions about car insurance costs

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