Why Is My Car Insurance So High?

Here are five reasons your car insurance rate might seem high right now and what you can do about it.
Ryan Brady
Kayda Norman
By Kayda Norman and  Ryan Brady 
Edited by Ben Moore Reviewed by Brenda J. Cude

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Car insurance rates are on the rise. The cost of car insurance rose over 15% in the first half of 2023 compared to the year prior, according to data from the U.S. Bureau of Labor Statistics

U.S. Bureau of Labor Statistics. Databases, Tables & Calculators by Subject. Accessed Aug 9, 2023.
. And more than half of Americans said they’ve noticed an increase in their own car insurance rate in the past year, according to a recent NerdWallet survey. If you’re like them, you’re probably wondering: “Why is my car insurance so high?”

Unfortunately, there’s no single answer. Many factors influence the price you pay for auto insurance. Some might seem obvious, like having a recent speeding ticket on record. But others may be less apparent, like your marital status or ZIP code.

Here’s an example of how insurance rates can change. The dark green bar in the chart below shows the average yearly rate for a 35-year-old driver with no recent traffic violations and good credit. The light green bars demonstrate how average rates rise after getting a DUI, causing an accident and more.

There are five main reasons your car insurance might be expensive:

Why your car insurance is so high

These are the five most likely reasons your car insurance rate might be high right now, along with some tips on what you can do to lower your bill. (Some states ban the use of one or more of these factors in insurance pricing, so they may not all apply where you live.)

1. Your personal characteristics


Young, inexperienced drivers are more likely than older drivers to get in a fatal accident. As a result, insurance companies generally charge higher rates for drivers in their 20s, according to NerdWallet’s most recent rate analysis.


In most states, insurers can charge different rates for male and female drivers. This often means young men are charged higher rates than young women. The price gap between men and women decreases dramatically by age 30, although it never disappears entirely. A handful of states — including California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania — don’t allow insurers to differentiate by gender.

In this article, NerdWallet uses the term “gender.” We recognize that this is different than sex. Gender is how you identify within society, while sex refers to certain biological attributes.

Some insurers don’t recognize this distinction and use the terms interchangeably. This means when applying for car insurance, they may ask for your gender, when they really mean sex.

They may also ask for identification that doesn’t reflect your gender accurately. For instance, a company may want the “gender” you list on your insurance application to match the sex listed on your driver’s license.

Marital status

Most large auto insurance companies have lower rates for married drivers than for those who are single, separated, divorced or widowed.


Drivers with college degrees generally pay less for car insurance. Insurers say highly educated people tend to file fewer claims. However, using education levels in setting prices has come under fire in recent years, and some states are moving away from allowing this practice.


Location is one of the primary factors affecting your car insurance rates. Average premiums vary dramatically by state because each state has different regulations. Rates also vary significantly by ZIP code and neighborhood. For instance, rural drivers pay less than those in cities, where vandalism, theft and crashes are more common.


Drivers with certain occupations pay higher rates because they’re more likely than others to file insurance claims, according to some insurers. But consumer advocates have challenged the use of occupation in setting car insurance rates. Some states have banned it or are considering a ban.

Credit history

In many states, insurance companies use credit-based insurance scores, which are different from your regular credit score, to set prices. Your credit score is typically a good indicator of your credit-based insurance score.

On average, a 35-year-old good driver with poor credit pays over 60% more for full coverage car insurance than an equivalent driver with good credit, a NerdWallet analysis found. Critics have questioned the validity of using credit history to determine a driver’s car insurance rate.

California, Hawaii and Massachusetts don't allow insurers to use credit when determining car insurance rates.

Home ownership

Some companies give homeowners a price break on car insurance, even if they don’t buy homeowners coverage through the same insurer. Many offer discounts if you bundle multiple policies, such as homeowners and auto insurance, with the same company.

2. How you drive

Driving record

If you’ve had at-fault accidents, traffic tickets or violations like a DUI, you’ll pay more for car insurance than a driver with a clean record. For example, a 35-year-old driver with good credit and a DUI on their record will pay more than double what a similar driver with a clean record pays for minimum coverage, NerdWallet’s analysis found. In some cases, you might need a company that specializes in insuring high-risk drivers.


Low-mileage drivers often get cheaper car insurance, because less time on the road means fewer opportunities for an accident. Low-mileage drivers may also save by choosing pay-per-mile insurance, which tracks how many miles they drive to set premiums.

Car storage

Keeping your car in a garage is less risky than parking it on the street, and your insurance rates may reflect this.

Years of driving experience

If you started driving at 23, you’ll probably pay more for car insurance at 25 than someone your age who’s been driving since 16. Your rates are likely to decline as you get more experience behind the wheel.

3. Your vehicle

Car make and model

Your rates are based in part on the claims your insurer has seen from other people who drive the same model as the car you’re insuring. Sports cars often have high insurance rates, for example, in part because insurers are more likely to pay out large claims from speeding drivers.

Insurance companies also consider factors like how much a vehicle will cost to repair, how popular it is with car thieves and how likely it is to damage another car in an accident. For example, insurance for electric cars tends to cost more due to their higher price tags and specialized parts.

Trim level

Vehicles with extra features like lane sensors, backup cameras and high-end audio can cost more to repair — and therefore more to insure — than base models of the same vehicle. Moving to a higher trim level typically raises not just the price of the car but also the insurance premium.

Safety features

Vehicles with a strong safety record and good safety equipment often qualify for discounts. On the other hand, some safety features can lead to higher premiums, because high-tech safety equipment can be expensive to repair or replace after an accident.

4. Your car insurance choices

Insurance company

If you’re looking at your declaration page and wondering why your car insurance rate is so high, a big reason might be the insurance company you chose. For example, drivers in Michigan can save thousands per year, on average, on full coverage by switching from the state’s most expensive insurers to the cheapest, according to our analysis.

And just because a company is cheapest in one state doesn’t mean it’s the cheapest across the country. That’s why it’s important to shop around and compare car insurance quotes to find the best car insurance rates for you.

🤓Nerdy Tip

Don't choose an insurer based on rate information alone. Consider the company's customer service, financial strength and complaint information as well. Read NerdWallet's auto insurance reviews to learn more.

Insurance lapses

Failing to pay your car insurance bill or canceling your policy because you’re between vehicles can cost you. Coverage gaps can make you seem like a higher risk in the eyes of insurance companies, and they’ll often raise your rates in response — or even deny you coverage altogether. To avoid this, consider pausing or reducing your coverage if you can’t afford your current premium.

Coverage selected

It’s no surprise that the more coverage you get, the more it will cost. We found that full coverage auto insurance costs more than three times as much, on average, as having the minimum required coverage. A full-coverage policy includes collision and comprehensive coverage, which pay to fix or replace your car after a variety of mishaps, like if you collide with other vehicles or animals, or if it’s stolen.

Add-ons like new car replacement coverage can boost the price, but the benefits may be worth it to you. That's why it's important to compare policies with the same coverage limits when you shop around.

Deductible amount

Your deductible is the amount you pay out of pocket when your insurer pays for a claim. For example, if your insurance company approves $3,000 worth of repairs and your deductible is $500, your insurer will pay $2,500. Your insurance premiums will be lower if you choose a higher deductible, like $1,000, but the payout will be lower if you have an accident.


You might expect your car insurance company to reward your years of loyalty with discounts, and some do. But some insurers try to predict which customers are the least likely to switch insurers and squeeze more profit from them through rate increases. Some states have banned this practice, called price optimization. It’s a good idea to compare car insurance rates to make sure your loyalty isn’t costing you.


Don’t assume your insurance company automatically applies all the discounts for which you’re eligible. For example, your insurer won’t know your teen is getting good grades unless you provide proof and ask for a good student discount. Insurance companies have tons of discounts, and you may save money by reviewing them with your agent on a regular basis.

5. Economic factors

Rising costs

Rising costs from inflation don’t just impact people — they impact insurance companies, too. And the multi-year spike in car prices and repair costs means many insurers must increase rates to keep up with more expensive payouts.

Increase in claims

On top of having to pay more for an insurance claim, insurance companies are also receiving a greater number of claims. The recent uptick in traffic fatalities and financial losses from extreme weather events have caused many insurers to raise rates to cover costs.

How to save on car insurance

Shopping around with multiple insurance companies is the best way to make your car insurance less expensive. Many factors affect an insurance quote, and each company calculates the factors’ relative importance differently. So the cheapest insurer for your neighbor likely won’t be the cheapest for you.

Unless you compare prices, you won’t know which company offers someone in your situation the best rate. NerdWallet’s car insurance comparison tool can help.

More tips:

  • Drive carefully. Your rates will be lower if you keep your record clear of accidents, speeding tickets and other violations.

  • Build your credit. In most states, building your credit by paying your credit card bills on time and paying off your debt can have a huge impact on your car insurance rates.

  • Choose your vehicle thoughtfully. When you buy a car, the sticker price and monthly payments aren’t the only costs to think about. Some models can be much less expensive to insure than others, so check rates before you buy.

  • Consider a higher deductible. If you can afford to pay a bit more out of your pocket after a claim, opting for a higher deductible will reduce your insurance rates. Then, if you don’t make a claim, you’re certain to come out ahead.

  • Ask for discounts. You might save money because of organizations you belong to, equipment on your car, setting up automatic payments or dozens of other factors.

Frequently asked questions

Auto insurance premiums are determined by factors you can control — such as where you live, the type of car you drive and how much coverage you buy — and those you can’t, such as your age or inflation. Poor credit can significantly raise your rates in many states, as can accidents or DUI violations.

Shopping around for car insurance quotes every year is the best way to make sure you’re paying as little as possible. Raising your deductible, bundling multiple policies with the same insurer, asking about discounts and (in some states) improving your credit are other effective ways to reduce your auto insurance rates.

Although dozens of factors go into your final insurance premium, these are among the most important:

  • Your driving history.

  • Your age.

  • Where you live.

  • Your credit history (in most states).

  • The car you drive.

  • The coverage and deductibles you choose.


NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for men and women for all ZIP codes in all of the 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information.

In our analysis, “good drivers” had no moving violations on record; a “good driving” discount was included for this profile. Our “good” and “poor” credit rates are based on credit score approximations and do not account for proprietary scoring criteria used by insurance providers.

These are average rates, and your rate will vary based on your personal details, state and insurance provider.

Sample drivers had the following coverage limits:

  • $100,000 bodily injury liability coverage per person.

  • $300,000 bodily injury liability coverage per crash.

  • $50,000 property damage liability coverage per crash.

  • $100,000 uninsured motorist bodily injury coverage per person.

  • $300,000 uninsured motorist bodily injury coverage per crash.

  • Collision coverage with $1,000 deductible.

  • Comprehensive coverage with $1,000 deductible.

In states where required, minimum additional coverages were added. We used the same assumptions for all other driver profiles, with the following exceptions:

  • For drivers with minimum coverage, we adjusted the numbers above to reflect only the minimum coverage required by law in the state.

  • We changed the credit tier from “good” to “poor” as reported to the insurer to see rates for drivers with poor credit. In states where credit isn’t taken into account, we only used rates for “good credit.”

  • For drivers with one at-fault crash, we added a single at-fault crash costing $10,000 in property damage.

  • For drivers with a DUI, we added a single drunken-driving violation.

  • For drivers with a ticket, we added a single speeding violation for driving 16 mph over the speed limit.

We used a 2020 Toyota Camry L in all cases and assumed 12,000 annual miles driven. We analyzed rates for drivers of the following ages: 20, 30, 35, 40, 50, 60 and 70.

These are rates generated through Quadrant Information Services. Your own rates will be different.

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