Why Is My Car Insurance So High?

How to Know if You're Paying Too Much—and What You Can Do to Lower Your Rates

Your car insurance costs are in some ways a reflection of you, with the rates you pay based on factors such as your driving record and where you live. If your premiums seem too high or have shot up in recent months, there are a variety of possible reasons for it. Fortunately, there are also ways to bring those premiums back down.

Key Takeaways

  • How much you pay for auto insurance is influenced by many factors, including your driving record, your car, and where you live.
  • Your credit score can also have an effect on your insurance rates.
  • You may be able to lower your costs by taking a defensive driving class or shopping around for a better deal.

What Determines How Much You Pay for Auto Insurance?

Though virtually every state requires drivers to carry a certain minimum amount of liability coverage, drivers have a great deal of flexibility in choosing the amounts and types of coverage on their auto policies. Americans paid an average of $1,633 in 2021, with projections for 2022 estimated at $1,707. The average American pays roughly $136 per month for car insurance, according to Insurify, the insurance comparison cost website.

But that's just an average, of course, and the price you pay could be higher or lower, depending on many different factors, such as:

  • Your driving record: When you request a quote from a car insurance provider, one of the things they look at is your driving record, which can include any traffic tickets you've received or accidents you've experienced. If you have a clean driving record, you will enjoy lower premiums. The opposite is also true; If you have a history of accidents, a DUI, or other instances of poor behavior on the road, your rates will go up.
  • Where you live: Insurance premiums can vary widely from state to state and even from place to place within the same state. For example, if you live in an area with a high crime rate, your insurer may charge a higher rate because it believes you're more likely to file a claim for theft or vandalism. According to the study mentioned earlier, Maine has the lowest full-coverage rates, at $965 per year, while Louisiana is the most expensive state at $2,724 a year.
  • How old you are: Younger, less experienced drivers tend to pay higher car insurance rates because they're considered more likely to have an accident than older motorists are. If a young driver is on a parent's auto policy, that can also affect what the parent pays.
  • Your gender: Women tend to have fewer and less serious car accidents than their male counterparts, so they generally pay less for insurance.
  • Your credit score: The connection may not seem as obvious as some of the other factors, but having a higher credit score will often result in lower car insurance premiums. That's because many auto insurance companies use your credit score as a proxy for how responsible a person you are.
  • Your car: If you're driving a super-expensive sports car, your insurance rates will be significantly higher than if you were rolling around in a sensible sedan. That's because it will cost more to repair or replace the former than it would the latter after an accident. Your car's overall safety record and specific safety equipment also figure into the equation. And according to the Insurance Information Institute, "Insurers not only look at how safe a particular vehicle is to drive and how well it protects occupants but also how much potential damage it can inflict on another car. If a specific vehicle model has a higher chance of inflicting damage when in an accident, an insurer may charge more for liability insurance."


Even if you don't think your auto insurance premiums are outrageously high, it can be worth shopping around every year or two to see if another insurer would charge you less for the same coverage.

What Can You Do to Lower Your Car Insurance Rates

Drive carefully. If you stay out of trouble on the road and don't present your insurer with any serious claims, your rates may fall over time. Many insurers now use telematics technology to monitor drivers' speed, acceleration, braking, and other factors and reward them with lower rates if they practice safe driving behaviors. If you're comfortable with that, it could be worth checking out.

Raise your credit score. Because your credit score is often an important factor in setting your insurance rates, anything you can do to improve it could pay dividends. Investopedia has this advice on how to improve your credit score.

Take a class. Many car insurers offer lower rates if you attend an approved defensive driving course. You may also be required to take a course if you're involved in a DUI or other offense.

Bundle your insurance policies. You may be eligible for a discount if you buy your auto, homeowners, or other policies from the same company.

Shop around. The car insurance industry is competitive, and companies are eager to add new customers. There are numerous websites where you can input your information and compare rates. If your premiums have gone up recently, it could be worth reaching out to your current insurance company or agent to find out why. If they want to keep your business, they may have some suggestions, such as other discounts you're entitled to, for lowering your rates.

Article Sources
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  1. Insurance Information Institute. "Automobile Financial Responsibility Laws by State."

  2. Kelley Blue Book. "Average U.S. Car Insurance Costs by State for 2022."

  3. Insurify.com. "Car Insurance Quotes Comparison (Updated 2022)."

  4. Insurance Information Institute. "What Determines the Price of an Auto Insurance Policy?"