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(Almost) Everything You Need to Know About Car Insurance

You don’t always have a choice when it comes to the bills you have to pay on a monthly basis, but auto insurance is one that might actually offer some options for customization—and for savings.

But you have to know what to look for. Below is a look at what your monthly premium actually buys you, along with a few common (and some not so common) tips to help you reduce your auto insurance expenses.

What Are We Paying For?

Across the United States, the current average yearly cost for auto insurance sits at $1,503.00. That’s a big chunk of change for most Americans, but how does it break down? In other words, what are you actually paying for? Here are the constituent parts of that expense:

Liability: $492.00

Collision: $286.00

Comprehensive coverage: $133.00

How Often Do We Use Our Insurance?

We’re all only too familiar with the monthly ritual of paying our auto insurance bills. It’s one of those facts of life that we’ve all, more or less, made our peace with.

But how often do we actually make use of that coverage? It might surprise you to learn that the average American driver files a collision claim only once every 17.9 years. Comprehensive claims occur only slightly less often, at an even 10 years.

Maybe that’s not overly surprising, but it still drives home the point that many of us might simply be paying too much for coverage we rarely use.

Geographic Breakdown

The cost of living in the United States has a tendency to fluctuate depending on where we live, and car insurance is no different. Currently, the states with the highest average cost of auto insurance are:

Michigan: $2,551

West Virginia: $2,518

Georgia: $2,201

Washington, D.C.: $2,127

Rhode Island: $2,020

Remember—that’s the cost for just one year of coverage. Conversely, other parts of the country enjoy a relatively lower average annual cost. Here are the states with the lowest insurance expenditures:

Iowa: $1,058

Idaho: $1,053

New Hampshire: $983

Maine: $964

Ohio: $926

By now you’re probably looking for some kind of pattern in those numbers—maybe some kind of geographical breakdown to help make sense of these radically different prices. It’s pretty clear from the data that there are complex socioeconomic factors at work behind the scenes, since they’re not neatly grouped by region.

So what if you don’t feel like relocating to take advantage of these lower rates? There are still some things that every American driver can take advantage of. Let’s take a look.

Potential Ways to Save

Before we get into it, note that not all of these potential savings will be available to every driver, or to every insurance policy. These are general tips and tricks, and aren’t meant to be taken as scripture. Nevertheless, you might get some mileage (no pun intended) out of these ideas. They come to us from Geico, Esurance, CJ Pony Parts, and Carinsurance.com.

Car features that make you eligible for a discount:

Driver-side air bags: 25% off personal injury insurance

Anti-lock brakes: 5% discount on collision insurance

Anti-theft system: 25% off comprehensive coverage

Daytime running lights: 3% discount

Again, keep in mind that this isn’t an exhaustive list—nor does it reflect the potential savings for each insurance company. Your mileage may vary, but keep these tips in mind next time you’re shopping for a new car; choosing a model with a few additional safety features may help you save a considerable amount of money in the long run.

Behavioral changes that can lower your bill:

Buying a new car might feel like overkill if you’re just trying to save a few bucks on your auto insurance bill. The good news is that there are some minor behavioral changes you can make long the way as well. Here are a few of them:

Pay for small repairs out of pocket: One of your goals should be to reduce the number of claims you make, which translates into a lower rate overall. If you’re faced with repair expenses under $1,000, consider paying for them yourself.

Get married: It might sound strange, but many auto insurance companies will cut you some slack if you get married. Savings are typically anywhere from 8 to 30% depending on your provider, so get out there and find The One!

If you have teens, list them on just one car: Teenage drivers, even if they’ve earned your trust, are magnets for terrible insurance premiums. If you have one or more teenage drivers in the household, be sure to put their name on the policy for just one of your cars.

Parting Thoughts

Hopefully you’ve enjoyed this look at the wider world of American auto insurance, and hopefully you’ve come away with some ideas for how to reduce your own expenses over time.

If you were to make use of just the most accessible insurance discounts, you could lower your total expenses to just over $1,000 per year. If that’s not a good motivator for doing a bit of research, I don’t know what is.

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