Why Is My Car Insurance So High?

You can’t control every factor that affects your car insurance rate. Shopping around will find you the best price.
Kayda Norman
By Kayda Norman 
Edited by Erica Corbin Reviewed by Brenda J. Cude

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The factors that affect your car insurance rates can seem like a complete mystery. That’s because some of them, such as your age, are outside your control. But others are within your grasp, like building your credit, driving safely and shopping around for the cheapest rates. In fact, by making changes in some of these areas, you can save hundreds of dollars a year.

25 reasons your car insurance is so expensive

Here are 25 factors that can cause your car insurance premium to go up and what you can do to lower your monthly 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.)

Your personal characteristics

1. Age

Young, inexperienced drivers are more likely than older drivers to be involved 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.

2. Gender

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

3. Marital status

Most large auto insurance companies have lower rates for married drivers than for those who are single, separated, divorced or widowed, research by the Consumer Federation of America shows.

4. Education

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.

Where you live, what you do and your finances

5. Address

Location is one of the primary factors affecting car insurance rates. Average premiums vary dramatically by state because each state has different regulations. Average rates in Michigan, for example, can be more than twice the average rates in Ohio. 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, according to the Insurance Information Institute.

6. Occupation

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.

7. Credit history

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. 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 driver with poor credit pays about 70% 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, Massachusetts and Michigan no longer allow this practice. According to the Insurance Information Institute, however, insurers argue that people with poor credit statistically file more claims.

Below are the average annual costs for policies with full and minimum coverage for drivers with poor credit.

Driver age

Full coverage

Minimum coverage







8. 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.

Where and how you drive

9. Driving record

If you’ve had accidents, traffic tickets or violations like a DUI, you’ll probably pay more for car insurance than a driver with a clean record. For example, a 35-year-old driver with 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.

Driver profile

Full coverage

Minimum coverage

Clean driving record, good credit



One at-fault accident, good credit



Clean driving record, bad credit



10. Mileage

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.

11. Car storage

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

12. 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.

13. Auto insurance claims history

When your insurance company pays an accident claim on your behalf, you may see higher rates at your next policy renewal. On average, drivers with a recent at-fault accident pay over 50% more for full coverage insurance than those with a clean record, according to our analysis. Some insurers offer accident forgiveness, promising not to raise your premiums because of an at-fault crash. However, adding that feature to your policy may cost extra.

14. Questions you’ve asked your insurance agent

Merely asking your insurance agent about a possible claim can affect your rates, even if you decide not to file. Such inquiries, especially if you tell the agent about damage, could be recorded in a database that many insurers use when evaluating risk. That might count against you when you shop for new insurance. If you’re simply wondering whether the repair costs exceed your deductible, it’s better to check your coverage information on the declarations page of your auto policy.

Your vehicle

15. 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, according to the Insurance Information Institute.

16. 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.

17. Safety features

Vehicles with a strong safety record and good safety equipment often qualify for discounts, the Insurance Information Institute says. 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.

18. Whether you own, finance or lease

Insuring a leased or financed car may cost more than coverage for one you own outright, simply because the lender may insist you buy more coverage types than you would have chosen. To protect their interests, lenders typically require collision and comprehensive coverage. They may also ask you to maintain a low deductible or to get gap insurance to pay the difference between the car’s value and the amount you owe on the lease or loan.

Your car insurance choices

19. Insurance company

You can make a huge difference in your car insurance rates by picking the cheapest insurer available in your area. For example, according to our analysis, drivers in Michigan can save over $3,000 on average per year for full coverage insurance by switching from their state’s most expensive insurer to the cheapest.

And just because a company is cheapest in one state doesn’t mean it’s the cheapest across the country. When we analyzed all 50 states and Washington, D.C., we found 20 different companies tied for the cheapest insurer. That’s why it’s imperative to shop around and compare car insurance quotes to locate the best car insurance rates for you.

Note: Although USAA was the cheapest option in several states, we did not include it in our analysis because it is available to only military, veterans and their families.

🤓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.

20. Previous insurance

If you’re switching from a nonstandard insurer, one that mainly covers high-risk drivers, you may pay more than a driver switching from a mainstream insurance company. Some large insurers charge higher rates to drivers who were previously covered by a nonstandard insurer, Consumer Federation of America research found. If you’re upgrading from minimum required coverage to a policy with higher liability limits, you may pay more for the same coverage than other customers, according to another study by the CFA.

21. 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 your current premium is unaffordable.

22. 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 twice as much, on average, as having the minimum required liability coverage only. A full-coverage policy includes collision and comprehensive coverage, which will pay to fix or replace your car if you collide with other vehicles, animals or objects 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.

23. Deductible amount

Your deductible on collision and comprehensive insurance is the amount the carrier subtracts from a claim. For example, if your insurance company approves $3,000 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. Deductibles don’t apply to liability claims.

24. Loyalty

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.

25. Discounts

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.

How to lower your rates

Shopping around is essential to find the lowest car insurance rates for you. 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 will offer 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, having a good credit history can save you hundreds of dollars a year on your car insurance premium compared with a driver with poor credit.

  • 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.

Note: 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.

Frequently asked questions

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.

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. 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.


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 any 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 2019 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 and 60.

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

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