Paying for insurance is one of the most daunting parts of owning a vehicle. Auto insurance can be expensive. It can also vary greatly across states and for various reasons. They include your age, driving history, and car’s make and model.
However, with rates finally decreasing, 021 might be the year to buy as much car insurance as possible, a new report shows. But don’t expect it to last long.
Car insurance rates fall for 2021
ValuePenguin recently issued its “State of Auto Insurance in 2021” report. It uses a variety of data from more than 15 million quotes across 35,000 zip codes. According to the report, “auto insurance rates have fallen.” They’ve dropped by 1.7% nationwide this year. The average annual cost of car insurance for 2021 is around $1,700. But some states average higher rate decreases than others. ValuePenguin says that “auto insurance companies are offering lower rates for customers in 2021 after last year saw an unprecedented low level of claims.”
The states with the biggest drops in insurance rates are Ohio and Michigan (4.3 percent) and Arkansas (4.8%). In fact, rates are falling in more than just a few states. They’re dropping in 45 states, with an average decrease of 2.3 percent. The five states where rates are not decreasing will still see only mild increases of 1.1 and 1.2 percent.
The highest and lowest insurance rates in the nation
While car insurance rates have fallen as a whole, that’s only an average rate percentage of all 50 states combined. That means rates vary greatly by state. Some fall far below the national average, and others catapult far beyond it.
Michigan car owners will pay the highest rates of any state — 353 percent higher than the national average and around $7,406 per year. This is mostly because of the state’s high minimum requirements for drivers. Insurance rates in Florida and Rhode Island hold yearly rates 71 percent and 52 percent higher than the national average.
On the other hand, rates are lowest in Indiana, North Carolina, and Maine, where they fall 40 to 47 percent below the national average ($865 to $987 per year). According to Autobody News, drivers with traffic violations could see an average premium hike of 117 percent. Minor violations could cause an increase of around 28 percent. And DUI violations could raise premiums an average of 157 percent.
Take advantage of low rates while you can
Rates have fallen by an average of 1.7 percent. But as the experts point out, it’s the first time this has happened “in over a decade.” Since 2015, rates have increased every year on an average of 0.44 to 7.11 percent. And when compared to insurance prices from 2011, premiums are still 106 percent more expensive today.
This year seems to be an exception to the past decade’s increasing insurance rates. But as Money Under 30 points out, “the car insurance industry is entirely based on risk.” And with the pandemic emptying roads up to 60 percent, the risk of paying out claims has dropped drastically. Because the pandemic won’t last forever, insurance rate drops probably won’t last forever either.
Though you shouldn’t expect these rates to continue decreasing, you can do a few things to ensure you’re getting the best rates possible. ValuePenguin’s analysis found that insurance quotes can vary by up to 242 percent between companies, so comparing quotes is essential. Working on building your credit score can also help minimize insurance rates because premiums can change up to 70 percent based on your credit score.