Determining Your Car Insurance Premium

In a survey done for the 125 biggest cities in the United States, NerdWallet determined the most expensive cities for auto insurance. A 26-year-old male with a clean driving record, driving a 2012 Toyota Camry with comp & collision can expect the following premium, depending on where he lives:

Philadelphia, PA$2,930
Miami, FL$3,168
Louisville, KY$3,255
Jersey City, NJ$3,266
Hialeah, FL$3,271
Baton Rouge, LA$3,363
Newark, NJ$3,525
Grand Rapids, MI$4,042
New Orleans, LA$4,309
Detroit, MI$10,723

In a close comparison by the North Dakota Insurance Department, insuring a similar person in Bismarck, ND would be close to $700 per year (average premium from over 19 insurance companies surveyed).

Understanding what insurers look at when they calculate auto insurance premiums can help you find ways to save on your insurance costs. In addition to where you live, here are the other most common factors affecting premiums:

  • Age, sex and marital status: People under 25 years old are more likely to get into an accident, so rates will be higher for young adults. Males and single individuals have higher premiums, as well.
  • Your driving record: Driving violations and accidents can lead to increased premiums. Luckily, these typically only affect premiums for three to five years after they occur.
  • The car you drive: A Porsche isn’t going to be cheap to insure since fixing it after an accident would cost much more than a typical sedan like the Ford Focus or Honda Civic. Cars that are commonly stolen (such as the Civic or Toyota Camry) might also come with a higher premium.
  • Your driving habits: Driving more miles or using the vehicle for business can increase your rates.
  • Your coverage limits: Higher limits are often advisable (accidents can be extremely expensive), but they result in higher premiums. A low deductible also raises your premium.

Want to explore more ways to save on auto insurance premiums? Give us a call!

Source: PIA of North Dakota


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