» State of the car insurance market in 2022

To set rates, insurance companies predict your risk of filing a claim based on factors in your driver profile. Car insurance companies each have their own way of calculating rates, but they all take similar factors into account. These can include your age, location, gender, marital status, driving record, credit history and vehicle.

Age

Teens pay the most for car insurance, followed by drivers in their early 20s. According to the National Highway Traffic Safety Administration, drivers between the ages of 15 and 20 accounted for 5.3% of all drivers but 7.8% of fatal crashes in 2019. Seniors also find higher car insurance rates on average because of an increase in insurance claims for the age group.

Location

Your location can affect what you pay for car insurance in a few ways. Some states require more car insurance coverage than others, which can increase the overall cost. Dense metro areas also have higher rates of accidents, which increases rates. The rates of theft and vandalism in your area also affect car insurance prices, as do natural disasters that cause widespread insurance claims.

Gender

Gender affects car insurance rates by less than 2% in the vast majority of states. Women pay about 2% more than men for car insurance in Arkansas and Georgia. On the other hand, men pay up to 7% more in a handful of states, including Louisiana, New Hampshire, Texas and Wyoming.

The following states don’t allow car insurance companies to use gender to calculate rates:

• California
• Hawaii
• Massachusetts
• Michigan
• Montana
• North Carolina
• Pennsylvania

Marital status

Married drivers tend to pay a bit less than single drivers for car insurance — they save about $100 to $200 per year. Insurance companies have found married people file fewer claims on average and often insure multiple vehicles or household members on one policy. Car insurance prices are all about risk, and married drivers generally present less risk than single drivers.

Driving record

Another big factor in the risk equation is your driving record. Speeding tickets, at-fault accidents and serious convictions like DUIs make you a riskier driver in the eyes of insurance companies. Our estimates show a speeding ticket can increase your rate by 26% and an at-fault accident can increase it by 53%. A DUI can increase your rate by 84%.

Credit history

The Fair Isaac Corporation (FICO) created a credit-based insurance scoring model in the 1990s. According to FICO, about 95% of car insurance companies use credit-based insurance scores to calculate rates in states where this is allowed. The Federal Trade Commission found credit-based insurance scores to accurately predict risk in a 2007 nationwide study.

The basic idea is that people who manage their credit obligations well also take better care of their cars and have less-risky driving habits. So, if you have a poor score, car insurance companies will charge you more to compensate for higher risk (except in California, Hawaii, Massachusetts, Michigan and Washington).

Vehicle

New cars cost more to insure because they are more expensive to repair after an accident. Insurance costs decrease as cars age. At some point, it isn’t worth carrying comprehensive or collision insurance to fix an older vehicle that has depreciated significantly. Cars that have a high rate of theft, like the Honda Accord or a Ford pickup, can also cost more to insure.