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Understanding Auto Insurance Rates

All about car insurance prices and the right coverage for you

  • Auto Insurance Costs

    Car insurance rates are affected by many factors. Some are simply the day-to-day costs of repairing a vehicle or covering medical expenses. Others may be more within your control when selecting an insurance policy. You want the right amount of coverage at the best price, and it's important to understand the trade-offs between cost and coverage.

    What Factors Affect My Auto Insurance Rates?

    What auto insurance costs and how much coverage you get for your insurance dollar go hand in hand. When you purchase auto insurance, you are sharing the financial risk of owning and driving a car with your insurance company. The amount of coverage you select and the deductible amount you're willing to pay determine the amount of financial risk you will have, even though you've purchased insurance.

    So for example, less coverage may be less expensive, but you will also have to pay more out of pocket when filing a claim. Having a low coverage limit can also put your personal assets as risk if a claim against you exceeds your coverage. Having more coverage might be more expensive, but it can also save you money when you have a claim or are found to be at fault in an accident involving others. Some other factors that affect your rates:

    • State - each state has their own insurance regulations that can affect costs. To learn more about insurance in your state, visit our Auto Insurance by State page.
    • Region - local average costs of repairing or replacing your particular vehicle or parts will affect your rate, as will medical costs, which vary by region also.
    • Personal Information - the driving records and credit-based insurance scores of the drivers on your policy typically raise or lower the price of your insurance.
    How Can I Control My Insurance Costs?

    Choosing the auto policy coverages and deductibles that work best for you is one way to control your insurance costs. Another is considering an Umbrella personal liability policy, which can add protection against large claims. If you own significant assets, including a home and retirement accounts, these could be at risk if your auto insurance coverage limits are exceeded in a judgment against you.

    Other ways to help lower your car insurance costs:

    • Make sure that all drivers on your policy practice safe driving habits
    • Consider safety features and affordability of repairs when purchasing a vehicle
    • Maintain a strong credit score
    The Bottom Line

    Your state has minimum auto insurance requirements, but the minimum coverage may not be enough to protect you from liability in the case of a serious accident. Ultimately, the cost of car insurance for your vehicles will be driven by the amount of coverage you need to protect all of your assets and what you can afford to pay as a deductible in case of a claim.

    Liberty Mutual wants to help you understand car insurance costs and how you can best protect yourself and your family. Connect with us online, by phone or with your local agent and we'll help you get the right policy at a fair price.

    Get an Auto Insurance Quote