Car Insurance Rates Drop Nationally
If you think you’re paying too much for car insurance, you could be right. According to the CarInsurance.com Premium Index (CPI), national car insurance averages dropped by $28 a year from June to July, and average premiums are down by over 17% from August of last year.
In fact, car insurance rates have been coming down steadily in the past twelve months, and most states are seeing a drop in their average costs as well. This data comes from tracking customer car insurance quotes from over a dozen insurers in 49 states and the District of Columbia. No data is provided for Massachusetts.
Of those listed, only five states, Wyoming, Illinois, Nebraska, Rhode Island, and Florida saw increases in rates. New Jersey and Vermont saw no significant change in premiums. The remaining 42 states as well as the District of Columbia saw decreases in the average car insurance quotes provided by CarInsurance.com, with Wisconsin leading the way with rates at 22.20% lower than last year.
Car insurance premiums are calculated based on a number of factors. Location is often key because a high density of traffic increases your risk for an accident (and therefore a claim against your insurance). People who live in urban areas will pay more on average for car insurance than those who live in the country, but there are other factors as well.
Your age, gender, type of vehicle, credit score, even your job title affect your car insurance premiums. Insurance companies spend millions of dollars each year to analyze claims data and look for trends.
Another important factor affecting your premiums is the state you live in. Lawmakers determine state minimum requirements, which vary widely. Depending on the level of coverage drivers must have, their insurance premiums will go up or down. When new laws are passed that increase minimum coverage, state averages are likely to go up.
When people are driving older cars – for example, during an economic crisis when they aren’t buying new cars as often – that will also cause car insurance rate averages to go down. This could be a major contributing factor to the decrease in car insurance premiums over the past year.