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What Actually Affects Your Car Insurance Price

The average driver spent $1,282 a year on car insurance. See what raises and lowers your price, and the parts you can actually change.

By AssistQuote Editorial Team

Reviewed by Shannon James Russell· Former licensed insurance agent and financial educator

Published September 24, 2026 · Updated September 30, 2026 · 4 min read

Quick answer

Where you live, your driving record, your car, and the coverage you pick drive most of your price. You can't change your ZIP code easily. But you can change your coverage, your deductible, and which discounts you get. And you can shop around every year.

Why two people pay such different prices

The average driver spent about $1,282 a year on car insurance in 2023. That was up 14% from the year before. But averages hide a lot. In North Dakota, it was about $692. In Louisiana, it was about $1,495.

Even two neighbors on the same street can pay very different prices. That's because insurers look at dozens of details about you, your car, and how you drive. Some of those you can change. Some you can't.

The things you can't change quickly

Where you live. Insurers look at crashes, theft, lawsuits, and repair costs in your area. Busy cities usually cost more than small towns.

Your driving record. Tickets and crashes raise your price, often for three to five years. A DUI can raise it for much longer.

Your age and experience. New drivers, especially teens, cost the most to cover. Prices usually drop as you gain years behind the wheel.

Your claims history. Even claims that weren't your fault can affect your price with some companies.

The things you can change

Your coverage. More coverage costs more. But this isn't the place to cut corners. See "The mistake to avoid" below.

Your deductible. This is the part of a claim you pay yourself. Raising it from $500 to $1,000 can lower your price. Just make sure you have that money saved.

Your car. Cars that are pricey to fix, or popular with thieves, cost more to cover. Check insurance prices before you buy a car.

How much you drive. Fewer miles can mean a lower price. Some insurers offer programs that track your driving with an app. Safe drivers can save. But hard braking and late-night driving can raise your price with some programs.

Your credit. In most states, insurers can use a credit-based insurance score. Paying bills on time can help over time.

Why did my rate go up if I didn't file a claim?

Your price can rise even with a clean record. Insurers raise rates when repair costs, medical bills, and car prices go up, or when there are more claims in your area. That's a good time to shop around. For ideas, see how to lower car insurance.

Discounts worth asking about

Don't assume you're getting every discount. Ask about these:

  • Bundling car insurance with homeowners or renters insurance
  • Safe driving, meaning no claims or tickets for a few years
  • Good student, for young drivers with good grades
  • Paying in full instead of monthly
  • Paperless and autopay
  • Safety features like anti-theft devices
  • Low miles
  • Your job or group, since some insurers give discounts to teachers, nurses, the military, and alumni groups

What the coverage words mean

  • Liability: pays for injuries and damage you cause to other people. Every state except New Hampshire requires it.
  • Collision: pays to fix your car after a crash.
  • Comprehensive: pays for theft, hail, fire, flooding, and hitting an animal. See what comprehensive covers.
  • Uninsured/underinsured motorist: pays you if someone with no insurance, or not enough, hits you.
  • Medical payments or personal injury protection (PIP): helps pay medical bills for you and your passengers. Some states require PIP.

The mistake to avoid

Many people buy their state's minimum liability coverage to get the lowest price. That's risky. State minimums can be very low. If you cause a bad crash, the bills can go far past your limits. Then you could be sued for the rest. That puts your savings, and even your future pay, at risk.

Many people choose much higher limits than the minimum. It often costs less than you'd think to raise them. Ask for quotes at a few different levels so you can see the difference.

How to shop smart

  • Get quotes with the same coverage. Otherwise you're not comparing fairly.
  • Check at least three companies. Prices for the same driver can vary a lot.
  • Shop again every year or two. Insurers change their prices.
  • Review after big life changes. Moving, getting married, adding a teen driver, or buying a car can all change your price.

Related pages

More car insurance guides: Car insurance cost · SR-22 insurance · High-risk car insurance · Liability-only car insurance · Car insurance for teens · How to lower car insurance · What comprehensive covers · Car insurance without a car · Umbrella insurance · All car insurance

Questions people ask

Where you live, your driving record, your age and experience, your car, and the coverage you choose.

In most states, yes. Insurers can use a credit-based insurance score. A few states limit or ban it.

Often three to five years. A DUI can affect it much longer.

Differences in crash rates, theft, lawsuits, repair costs, and state rules all play a part.
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