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Average Car Insurance Rates Revealed

Written by Todd Clay. Posted in Research Last Updated: 08/21/2012

Paying too much for auto insurance? Find out the average car insurance rates by state, so you can shop smarter in your zip code and city.

average car insurance Rates Vary By State And Other Factors

Average Car Insurance Rates Vary

Is there such a thing as average car insurance rates? According to NAIC in 2009, the average car insurance premium in the state of New Jersey was $1101 while the average cost in North Dakota was $510. That’s an 53.7% difference – big money when you’re buying a policy every year. According to that same study, average car insurance premiums across the nation were $789, which still makes New Jersey’s average car insurance rates ridiculously high.

Updated Insurance Rates by State

We also compiled some average car insurance rates below. For now, the better answer to the question about average car insurance rates is that it all depends.

Auto Insurance Rates Depend On Your Location

As you may have guessed, auto insurance rates depend on your state of residence. As we have already talked about the average car insurance premium in New Jersey is notoriously high. Historically, insurance regulations in New Jersey are strict. In some cases, regulators have encouraged some companies to leave, decreasing competition, and thereby driving premiums even higher. Still, as high as New Jersey rates are, they’re usually more in Washington, D.C.

In addition, the average car insurance rates in a city, will be more than the average car insurance rates on a farm. Because, insurance companies base their prices on risk, city-dwellers pay more. It’s more likely for bad things to happen to your car in a city than driving to and from the convenient store in Podunk, USA.

Average Car Insurance Rates Depend On Your Driving History

For those that have a not-so-stellar driving history, insurance companies will reward them with not-so-stellar average car insurance rates. Drivers with clean/clean records earn cheaper premiums. Clean/clean is insurance-speak for no accidents and no tickets. If you drive without accidents or tickets for three years, in most cases insurers won’t count your old record against you. There are definite exceptions to the rule like DUIs.

 Average Car InsuranceRates Depend On Your Age and Sex

Like it or not, younger drivers carry more risk than older, more experienced drivers. As such, drivers under 25 usually pay more for their car insurance policy than drivers over 25. If you’re under 25 right now, don’t worry, it’ll be here before you know it.

In addition, the average car insurance rates for younger female drivers are often less than their male counterparts. Research shows younger males are more aggressive drivers, often having more accidents than females in the same age bracket. That’s why insurance companies charge higher premiums for young male drivers.

Average Car Insurance Rates Revealed

As for average car insurance rates, we compiled a list of rates from several states. Although they’re not definitive lists, it’s a helpful tool for comparing rates at different companies in a few different states.

It’s better to compare your current premium to a few other companies directly. Make sure you get several quotes before you settle on a policy. You may not know the exact average car insurance rates, but you’ll find out if you’re getting ripped off by your current insurer.

Was this article on average car insurance helpful? Let me know what I missed!

Full Coverage Auto Insurance

Written by Todd Clay. Posted in Definitions Last Updated: 10/14/2011

Answering 4 questions about full coverage auto insurance: What it is – What it’s not – How to use it – and Do you really need it?

If you backed into something would full coverage auto insurance cover it?

If you backed into something, would it be covered by comprehensive or collision?

A lot of people throw around the term full coverage auto insurance. A friend, a family member, or even your insurance agent may have said it before. Technically-speaking, full coverage auto insurance doesn’t exist. But it’s important to know what it means to most people.

One of my insurance trainers drilled into my head “there’s no such thing as full coverage auto insurance – there’s no such thing as full coverage auto insurance”. Still, consumers everywhere use the term “full coverage auto insurance”. So my purpose is to help you understand what full coverage auto insurance really is, what it’s not, what it does, and whether you need it.

Question #1: What is Full Coverage Auto Insurance?

Full coverage auto insurance refers to your auto policy when it has both liability coverage and physical damage coverage. Physical damage coverage is usually referred to as comprehensive (comp) and collision.

Collision covers the physical damage to your vehicle in an at-fault accident. That means, if you run a red light and cause an accident, collision covers the busted headlight on your car – minus your deductible.

Comprehensive (comp) covers physical damage to your car from acts of God and other such incidents. If you’re using comprehensive coverage, the damage to your vehicle cannot be your fault. For instance, if you’re driving down the road and a rock hits your windshield causing a crack, your comprehensive would cover the loss – minus your deductible.

Question#2: Why Isn’t It ReallyFull Coverage Auto Insurance”?

As you can probably tell, it’s not exactly ‘full coverage auto insurance’. You still have to pay your deductible to use comp and collision. Sometimes your deductible is $50 and sometimes it’s $1000 – whatever it is, your ‘full coverage auto insurance’ won’t cover the deductible. You have to write the check for your deductible.

Also, you can’t intentionally wreck your car. In fact, there’s nothing that will cover that type of damage. So in case you’re standing at the edge of a cliff ready to send your old beater to its final resting place, you can back up now. There’s no auto insurance for intentional damage – maybe jail – but no coverage.

Question #3: How Do You Use Full Coverage Auto Insurance?

Hopefully you’ll never have to use your car insurance, but you might. If a tree ever falls on your car, or you sideswipe another car, then you want to notify your insurance company. This information is your proof of insurance in the glove box (you do keep a copy in your car, right?). Your insurer will help you through the process

Call them up and explain the physical damage situation to your vehicle. If another driver was not involved in the incident and you were not at fault, then it’s probably a comprehensive claim. If you were at-fault in the incident, then it’s probably a collision claim, Your auto insurance company will help you at that point. As always, claims are subject to policy guidelines.

Question #4: Do You Really Need a form of Full Coverage Auto Insurance?

That depends. Auto insurance companies usually recommend you carry comprehensive and collision coverage if you have a newer car. You might also consider getting full coverage if you can’t afford to replace the vehicle with cash. Finally, your bank requires you to maintain comp and collision on the policy if you’re financing the car. Banks like to be paid if you ever total your car.

If you have a later model vehicle, it may be time to drop your comp and collision. If you can handle the risk of a car worth a few thousand dollars, it could be worth it to drop full coverage to save some premium dollars.

Your insurance company should be able to guide you in such a case and advise you if having what everyone else calls “full coverage auto insurance” is in your best interest.

GEICO Review

Written by Todd Clay. Posted in Our Reviews Last Updated: 08/17/2012

Did I really save 15% on my car insurance by switching to GEICO? – My GEICO Review

GEICO Trademark

For anyone shopping for car insurance, who hasn’t seen the GEICO lizard?

Probably about as many people who haven’t been to a grocery store. The talking Cockney gecko is about as well known as peanut butter and jelly. And to think, before 1999 – he didn’t even exist. Such is the power of modern advertising.

Stripping away the creative façade of cavemen, celebrity spokespeople and promises of 15% savings, is GEICO all it’s cracked up to be? Read on to find out.

About the Company – GEICO Review

GEICO, or Government Employees Insurance Company, is a popular car insurance company in the United States. Bought by Warren Buffett’s holding company in 1996, GEICO is now owned by Berkshire Hathaway. According to their website, GEICO boasts 8,000,000 policyholders as of 2007 – no small accomplishment for this business.

GEICO does not have an agency force in the community like other companies. Aside from the occasional offices in metropolitan areas, the majority of quotes, policy service, and claims work is handled over the phone via call centers.

As for financial strength, GEICO is strong. According to independent agency AM Best, GEICO rates a superior ‘A++’, their highest rating. Other services give GEICO a similar rating. According to those in the know, GEICO will be around for awhile.

Getting a GEICO Quote

Knowing their reputation, I wanted to get a quote from GEICO. To save time, I usually recommend what I did. First off, grab an online quote. Second, if it makes sense, call them on the phone with the online quote. Here’s how I did it.

To start, I grabbed my current auto insurance policy. Second, I jumped online, to fill out their questionnaire. I input my personal info, then matched my coverages to my current policy. GEICO shot back my quote 10 seconds after I clicked ‘Submit’ – very fast. Since GEICO’s price was much better than I’m paying now, I called them up.

GEICO Positives: Availability & Price

After being transferred to the right person, I started talking to Holly S. in Virginia Beach, Virginia. She told me she was in one of several call centers across the country. I called at night and, out of curiosity, asked her if someone would have picked up the phone at 3 am. According to Holly, she assured me GEICO would have answered the line.

Availability strikes me as a great positive for a car insurance company. If GEICO is willing to pick up the phone to give me a quote at 3 in the morning, then they’re probably willing to pick up the phone to fill out my claim at 3 in the morning.

GEICO quoted me a great rate online. Fortunately, there was no bait-and-switch when I called Holly in Virginia Beach. What they quoted online, they honored on the phone. That’s a huge benefit, especially as it relates to the integrity of their sales force.

One caveat to their pricing: GEICO seems to give a ‘best guess’ rate without asking for your social security number online. After you talk to them, they confirm the price. If your credit matches what you said online, then you get the rate. If not, the price probably goes up.

GEICO Negative: Pushy?

I had one problem with confirming my phone quote. Holly was a little pushy. She did not ask me about my personal insurance situation and went right for the close. This was a little unnerving to me as a former insurance agent. I would have liked her to walk me through the coverages, instead of just trying to take my order. Holly was definitely assertive, but she was polite.

What about GEICO’s Service?

I looked at complaint ratios at a few major departments of insurance. Consumer complaints are either average, or below average compared to other auto insurance companies. No company is perfect, but GEICO seemed to meet a basic level of service for their customers. On a claims basis, I felt comfortable carrying my car insurance with GEICO.

I ended up getting GEICO after shopping around for awhile. I’ve had them for over a year now (Sept 2009). I’ve called them a few times and they’ve been very responsive. I even dropped by their office in my town to re-add comprehensive to my truck. They were helpful and friendly. I didn’t like how they made me come by their office for that basic service. Seems like they could have sent out an agent to do an inspection. Oh well.

I can say this. They were extremely responsive when I got a new insurance card.

Did I save 15% on my Car Insurance by switching to GEICO?

Their reputation, availability, and price, all contribute to a good feeling of going with the gecko. As for saving 15% on my car insurance. When I signed up with GEICO, I saved +20% on my car insurance premiums compared to State Farm.

Way to go GEICO!

Quote Process: 10
(Scale 1-10: 10=the best)

Price: 9
(Scale 1-10: 10=Cheapest)

Customer Service: 9
(Scale 1-10: 10=the best)

Claims: *
(Scale 1-10: 10=the best)

Overall Rating: 9
(Scale 1-10: 10=the best)

Anything to add? Leave a comment about your experience with GEICO or write your own review.

State Farm Review

Written by Todd Clay. Posted in Our Reviews Last Updated: 12/14/2012

Former State Farm Agent shops around: When good service isn’t the only thing you should look for in a car insurance company.

I worked as an employee, as an employee of an Agent, and as an Agent of State Farm Insurance.  My dad is still a State Farm Agent.

“Like a good neighbor, State Farm is there.”

That may be one of the best taglines in the insurance business. It hearkens back to a time when your insurance agent was just down the street. A time when you might drop by his office on your walk to the post office. It reminds me of a quaint town that may not even exist anymore. That’s the image ‘good neighbor’ insurance conjures up in my mind.

And believe me, they know it.

That’s why they’re now spending millions of dollars trying to convince young consumers they’re not just your father’s insurance company. They’re constantly targeting younger drivers. At the time of this review, a quick look at their main homepage revealed 5 people under 35. I was under 35 when I initially wrote this review – does State Farm have my business? More on that below.

About the Company

State Farm Insurance is one of the oldest auto insurance companies in the United States. Founded by a farmer, G.J. Mecherle, they’ve grown to be the largest private insurance company in the country. Boasting over 75,000,000 policies, they insure more cars than any other company on the planet. AM Best rates most State Farm Companies with a AA rating (very strong).

According to their website, State Farm consists of 13 separate financial services companies. They sell fire, auto, life, and health policies. They also market bank products and investments though the majority of their revenue comes from auto and home policies. State Farm is first and foremost an insurance company.

My Experience as a State Farm Policyholder

I’ve been a State Farm policyholder for as long as I’ve bought car insurance. My dad is still a State Farm Agent. I’ve had accidents, tickets, one reckless and a few cracked windshields as a State Farm policyholder. Overall, I’ve paid more money to State Farm than they’ve ever paid out on me – so I guess that puts them ahead.

Overall, I’ve had a positive experience as a State Farm policyholder. Even though I know a bit about car insurance, State Farm people were very helpful before I started working for them and while I learned the business. Typically, State Farm Agents and their employees know their stuff.

State Farm Positive: Personal Service

State Farm sells and services their policies through their network of 17,000 Agents. Usually, each State Farm Agent has their own office and support staff. I’ve had my insurance with a couple of different agents (besides myself). Both offices in Texas & Washington had superb service. If I had a question on my monthly payments, any coverages, or claim issues, the staff was outstanding.

Not every State Farm policyholder has this good experience. If you’re sold on State Farm but you don’t like your current Agent or their staff, then change Agents. To me, good service is the main thing you’re paying for at State Farm. If you’re unhappy with your Agent, then you’re usually overpaying – big time.

State Farm Negative: Price

Which brings me to State Farm’s #1 weakness: price. I live in Texas. In Texas, my rates are relatively high: Out of 50+ auto insurance companies doing business in the state, State Farm is #25 for price in my age group: Texas Rates.  From my experience and research, this is normal. For whatever the reasons, State Farm car insurance rates are higher than their competition.

That’s one of the reasons State Farm’s advertising highlights their good service. Some people are willing to pay extra money so that the same Agent will pick up the phone anytime they have an insurance question. To them, it’s worth it.

Is State Farm Worth It To Me?

To me, it’s not worth the extra 38% for my monthly premiums. That’s compared to just one of the quotes I got from another reputable auto insurance company.

I’m not married to State Farm. They’ve been a good company, but I’m shopping around. Until they bring their rates in line with some of the other great car insurance companies out there, I’m bringing my business to somebody else.

State Farm might be great for you, but consider the alternatives. Even as a long-term policyholder, I’m glad I shopped my rates. I’ll be saving 38% every month – at least. I hope you can do the same.

Quote Process: 8
(Scale 1-10: 10=the best)

Price: 3
(Scale 1-10: 10=Cheapest)

Customer Service: 9
(Scale 1-10: 10=the best)

Claims: 9
(Scale 1-10: 10=the best)

Overall Rating: 6
(Scale 1-10: 10=the best)

Do you have something to add? Leave a comment or write your own State Farm review.

Esurance Review

Written by Todd Clay. Posted in Our Reviews Last Updated: 03/18/2009

How Esurance simplified car insurance with their ‘Quote. Buy. Print.’ and how they’re still turning heads with their spokes-agent, Erin.

Secret Agent/Insurance Agent Erin Esurance

Iconic Secret Agent/Insurance Agent - Erin Esurance

I like what Esurance has done in the car insurance industry. With a few other companies like GEICO and Progressive, Esurance has simplified the auto insurance buying process. They’ve made the old-guard like State Farm and Allstate worried. Sure, there are some problems with that (more below), but I love it when companies make things easier.

Esurance advertising is bold. Somewhere around 2003, someone in marketing asked a question like: “GEICO has a lizard. Why don’t we get a young, pink-haired, undercover secret agent/insurance sales-vixen for our commercials? Let’s call her ‘Erin Esurance.’ What d’ya think, Boss?” That poor-CEO must have had a tough sell when he presented their new mascot to the board. But in marketing, different works today. And today, Erin works for Esurance.

About the Company: Esurance

Esurance was a Silicon Valley start-up in 1998. Ten years later, they’ve become one of the fastest growing insurance companies in the United States. They’re currently owned by White Mountain Insurance Group (WTM), a global insurance holding company.

Esurance sells or re-sells insurance for cars, motorcycles, watercraft, home, renters, health, and even life insurance. They primarily focus on auto and home insurance products, or as the industry likes to call it, property and casualty business. At first, I thought they were just a reseller, but Esurance actually markets their own policies direct to consumers.

Esurance is a financially strong company, although not as strong as many of their larger competitors. According to independent rating agency AM Best, Esurance carries an ‘A-‘ or ‘Excellent’ rating.  They are a stable company with the backing of an even stronger holding company.

Getting an Esurance Quote

In the old days, us consumers went from dingy office to dingy office to get a quote for our car insurance. These days, it’s pretty easy to get an online auto quote. Esurance is one of the reasons why. They are pioneers of internet auto insurance.

Knowing their history, I jumped online for a quick quote. It was simple, straightforward, and, so-long as I knew about the coverages, informative. In less than 5 minutes, I had an auto quote on my screen and one in my email inbox. Esurance rates very well for quote accessibility.

After that, I called them up. It was 7 am and I got Kelly in Nebraska. Evidently, Kelly was an Esurance insurance agent who works out of his home to give quotes to would-be customers. I’ve spoken with many insurance agents. From my experience, Kelly was one of the better ones. He was informative, pleasant, and eager to get my business – never mind that he couldn’t find my online quote in his system. Many call center agents could learn a few things from Esurance Agent Kelly.

When he finally gave me a quote, the price was close to what I got online. At least it was less than what I’m paying right now – which is always good.

Esurance Positive: Simple Car Insurance

Like Progressive, Esurance offers a virtually-frictionless car insurance transaction at their website. If you’re comfortable giving your credit card online, then you can have a policy in a few minutes. There’s no need to go through the extra step of calling. However, to get a better feel for the policy, I don’t discourage the phone call – especially if you’re uncomfortable with all the coverages on the policy.

Esurance Negative: Not a “Centralized” Insurance Company

Car insurance isn’t just about getting a quote. It’s a promise. Will Esurance take care of me if something happens to my car? From what I can tell, they stand behind their product. Independent ratings show them to be a strong company, they lived through the dot-com bust, and emerged a very strong competitor in the auto insurance industry.

And still, it has the feel of an internet company. From the online quote, to the Silicon Valley headquarters, to the agent telecommuting in Omaha, Esurance doesn’t feel like your typical car insurance company. In a way, they feel like an internet bank or like, well, this website. Nothing against their business model, it’s just not like the other guys.

Will I Be Hiring Erin Esurance?

I’m still shopping for car insurance after Esurance. Their price wasn’t enough to make me move from my policy – at least not yet. I may yet hire the pink-haired secret agent – prices change with carriers. After all, I’m shopping because my company is high right now. And yet, I’m still calling around.

Quote Process: 9
(Scale 1-10: 10=the best)

Price: 7
(Scale 1-10: 10=Cheapest)

Customer Service: 8
(Scale 1-10: 10=the best)

Claims: *
(Scale 1-10: 10=the best)

Overall Rating: 8
(Scale 1-10: 10=the best)

Anything to add? Leave a comment about your experience with Esurance or write your own review.

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