How much is car insurance

Reasons car insurance rates vary

Vehicle insurance rates can differ from one car to the next and even between drivers. Most car insurance companies will have their insurance agents collect information about your car when developing a quote. They’ll also ask you about your preferred coverage limits, which can adjust the cost of your car insurance policy.

Factors that determine car insurance rates

Agents will look at state-required coverage to ensure you have the protection you need to drive legally. Here’s an in-depth look at some of the individual factors that can influence your auto insurance rates.

Age

Your age can influence the average cost of car insurance. Rates usually go down for drivers after they turn 25, but young drivers may get lower rates with our discounts.

Insurers consider age when they calculate auto insurance. It’s one factor that can correlate to claim frequency and how severe those claims tend to be.

Driving record

Tickets, at-fault accidents, and recent claims can signal higher risk of future losses. That’s why insurers review your driving history because it helps set car insurance rates. These signals can raise your premium and increase the average car insurance cost compared to drivers with clean records.

On the other hand, a clean record often helps support lower estimated premiums when creating an auto insurance estimate. Some of our safety discounts include:

Accident free — qualify for an added discount on your auto insurance if you’ve been accident free for up to 5 years.

Violation free — if you’ve been violation free for the last 5 years, get rewarded for your good driving habits with an additional discount on your auto insurance.

View discounts >

Vehicle make and model

The cost of your car and the year it was produced will also be used to help generate your insurance rates. Policies for new, expensive vehicles usually cost more than policies for older, cheaper cars. Vehicle make and model also affect the cost to repair or replace the car after a claim. Parts, labor, and specialized technology can raise claim costs.

When insurers calculate auto insurance rates, they also consider how different models perform in real-world losses. For example, they examine how often someone steals a model and how severe the claims are. That’s why two vehicles from the same year can still have different quote ranges.

Why do red cars cost more to insure?

Despite the common belief that red cars cost more to insure, insurers typically don’t use vehicle color to set your price. Rates are generally based on risk signals tied to the driver and the vehicle, not paint color.

Instead, premiums are influenced by auto insurance factors such as the car’s:

• Make/model
• Repair costs
• Safety features
• Engine size/performance
• How much you drive
• Your driving history

Because some vehicles often bought in red are also sportier or cost more to repair, it may seem red cars cost more. The real factor is the vehicle and the driver’s risk profile, not the color.

Where you live

Where you live can affect your car insurance rate—especially your state. Auto insurance rules and requirements vary by state, which can influence what coverage is available and how pricing works.

Weather patterns in your area can also play a role. Places that see more severe weather may have a higher risk of storm-related damage, which can affect insurance costs over time.

Because state guidelines and weather risk differ across the country, rates can vary—even for the same driver and vehicle.

Eligible discounts

One way to estimate your auto insurance cost is to factor in discounts you may qualify for. For example, bundling multiple policies with your auto coverage can help lower your premium. Here are a few options to discuss with your agent:

• Bundle home + auto
• Bundle renters + auto
• Add an umbrella policy
• Enroll in a usage-based program (DriveMyWay + MilesMyWay)
• More auto insurance discounts

Annual mileage

You’ll likely be asked about the way you intend to use your car when you apply for auto insurance. Insurers will also ask you about the distance you drive to and from work each day and about your projected annual mileage.

As a reference point, many drivers average roughly 12,000–15,000 miles per year. If you drive above that range, your premium may increase.

On the other hand, if you drive less than the average, you can be eligible for up to 25%* off if you enroll in our MilesMyWay program.

Coverage limits

One way you can control the cost of your auto insurance is to request quotes on various coverage limits. By adjusting these limits and your deductible, you should be able to work with your budget to find the coverage you need.

Because many states require car insurance that protects you from uninsured drivers, you’ll likely need more than the minimum coverage required. You may also want to add bodily injury liability coverage; it can help if you’re liable for an accident that caused injuries to others.

Going paperless

At American Family, you may be rewarded when you enroll in My Account and choose paperless billing. You can also go paperless by downloading the MyAmFam app.Once you’re enrolled, you can still manage billing, handle insurance claims, and review select policy details—without paper statements.

How is car insurance calculated?

Car insurance companies base rates on risk. They look at details about you, your vehicle and how you use it. Then they use that information to estimate how likely you are to have a claim—and how costly that claim could be.

That’s the foundation of how car insurance is calculated. And it’s why two people can get different prices for similar coverage.

In general, the process starts with the coverage choices you make. These include liability limits, comprehensive and collision, and your deductibles.

From there, an agent or quoting tool considers factors like:

• Your driving record
• Age and experience
• What vehicle you drive
• How much you drive
• Your past insurance history

Some drivers may also be able to add more transparency and personalization to pricing with usage-based insurance (UBI). UBI programs use driving data (like miles driven and driving behaviors) to help better reflect your individual risk—so you can get a clearer view of what’s influencing your rate and pay based on how you drive.

Discounts may also apply, which can lower the final premium. To get a more accurate estimate, compare quotes with the same coverage and limits. Review discount eligibility too, so you compare apples to apples.

How to estimate car insurance yourself

If you’re wondering how to estimate car insurance on your own, start by listing the following:

• Key coverage choices you want—especially your liability limits
• Whether you’ll add comprehensive and collision
• Deductible amounts you can afford

Then gather the details insurers typically use to price a policy, such as:

• Your driver and household information
• The car’s year/make/model
• Where it’s garaged
• How many miles you drive

These items are some of the most common auto insurance factors that can influence your rate. With this info, you can run a few quotes using the same coverages and limits each time to compare pricing more accurately. As you review results, look for what causes pricing differences, like deductible changes, coverage changes, or discount eligibility. This can help you estimate a realistic premium range and decide which adjustments make sense for your budget.