Car insurance is a legal requirement in most states, but the cost of auto insurance varies based on many different factors. Your vehicle make and model, location, coverage choices, and credit score are just a few of the factors that can impact the cost of insurance. In this article, we'll look at car insurance expenses and share some tips for lowering your premium.
Most Expensive Cars to Insure by Make and Model
Luxury and high-end sports cars are usually the most expensive vehicles to insure. These vehicles are expensive to repair and replace, which corresponds to higher insurance rates. These vehicles are also more likely to get stolen than less desirable cars.
Here are the most expensive cars to insure in 2023, according to data from CarInsurance.com:
- Maserati Quattroporte: $5,176 a year.
- Maserati Quattroporte Modena Q4: $5,118 a year.
- BMW M8 Competition Grand Coupe: $4,231 a year.
- Porsche Panamera Turbo S E-Hybrid Executive: $4,221 a year.
- Audi RS e-tron GT: $4,150 a year.
- Porsche Panamera Turbo: $4,129 a year.
- Tesla Model S Plaid: $4,115 a year.
- BMW M8 Competition XDrive: $4,054 a year.
- Porsche Taycan Turbo S: $4,028 a year.
- Audi R8 5.2L V10 Quattro Performance: $3,967 a year.
- Audi RS6 Avant Quattro: $3,922 a year.
- BMW M760i xDrive: $3,911 a year.
- BMW M850i xDrive Gran Coupe: $3,854 a year.
- Maserati Ghibli Trofeo: $3,840 a year.
- Alfa-Romeo Giulia Quadrifoglio: $3,695 a year.
- Acura NSX Type S: $3,626 a year.
- Dodge Charger SRT Hellcat Redeye: $3,533 a year.
- Dodge Charger SRT Hellcat: $3,528 a year.
- Porsche 911 Carrera Targa 4 GTS: $3,527 a year.
- Tesla Model S Long Range: $3,503 a year.
Most Expensive States for Car Insurance
Car insurance costs vary from state to state depending on factors like weather risks, population density, the number of uninsured drivers, and the frequency of expensive lawsuits. As of 2023, these are the most expensive states for full-coverage car insurance, according to Consumer Affairs:
- Louisiana: $2,865 a year.
- Rhode Island: $2,645 a year.
- New York: $2,642 a year.
- Washington, D.C.: $2,630 a year.
- Michigan: $2,606 a year.
- Florida: $2,480 a year.
- New Jersey: $2,451 a year.
- Georgia: $2,421 a year.
- Nevada: $2,322 a year.
- Delaware: $2,293 a year.
Most Expensive Countries for Car Insurance
Auto insurance costs also vary among countries. Different laws and economic conditions contribute to each country's national average insurance costs. In 2023, Australian financial comparison website ComparetheMarket.com.au published this list of the most expensive countries for car insurance, with all average car insurance premiums listed in US dollars:
- Canada: $1,316 a year.
- United States: $1,018 a year.
- Ireland: $970 a year.
- Norway: $848 a year.
- Finland: $720 a year.
- Germany: $717 a year.
- Australia: $704 a year.
- United Kingdom: $692 a year.
- France: $672 a year.
- Netherlands: $660 a year.
The Various Factors Behind Insurance Costs
Insurance companies look at a variety of factors to determine the price of your car insurance policy. While factors used to calculate the cost of car insurance vary among insurance providers and different states, here are some common ones.
Risk Profile Assessment
When you apply for an insurance policy, the provider will conduct a risk profile assessment. This assessment evaluates how risky you are to insure. Specifically, the insurer may consider your age, driving record, and credit score to figure out how likely you are to get into an accident or file a claim that would require the insurance company to provide a payout.
Car Model and Age
As seen above, sports cars, luxury vehicles, and electric vehicles are some of the most expensive cars to insure. Their high prices and expensive components make them costly to replace and repair. They're also targets for thieves. In general, new cars are more expensive to insure than used cars. Because new vehicles haven't depreciated much, insuring them is more expensive than similar older vehicles.
Geographic Location
Your location is another factor that can impact your car insurance rate. For example, areas prone to hurricanes and hailstorms tend to be more expensive, as residents there make more claims for the damage caused by these weather events. Prices also vary within a state. For instance, drivers in rural areas with fewer cars on the road may pay less for their insurance than those in urban areas, as they are less likely to be in accidents.
Car Usage and Driver's History
The way you use your car also impacts the price you'll pay for insurance. For example, if you work from home or regularly take public transportation, there's a lower chance of getting into an accident than someone who drives to the office daily. Many insurers offer discounts if you drive fewer miles than average.
What Type of Coverage Do You Need?
It's essential to have enough coverage to protect you and your car. The more expensive your vehicle, the more insurance you'll need. State laws also influence the amount of insurance coverage you need. Consider the following types of coverage for your vehicle:
Liability Coverage
Liability insurance is legally required in most states. It covers your financial responsibilities when you cause an accident. While liability insurance is required in almost every state, your state's minimum requirements may not be enough to cover the full cost of an at-fault accident. Purchasing enough liability insurance to cover your personal assets and protect yourself from lawsuits is a good idea.
Collision and Comprehensive Coverage
If you're financing or leasing a vehicle, your lender or leasing company will probably require you to purchase collision and comprehensive insurance. Collision insurance pays for repairs to your car after an accident with another vehicle or structure. Comprehensive insurance pays for non-collision damage claims, like theft, vandalism, or natural disaster damage. This is also called a full coverage policy.
Personal Injury Protection Coverage
If you live in a no-fault state, you're probably required to carry PIP coverage. This policy is often sold as an optional add-on in other states. PIP pays for your medical bills if you're injured in an accident, regardless of which driver is at fault. It will also cover your passengers' medical care.
Gap and New Car Replacement Coverage
If you total your car and you owe more than your insurance will pay to replace it, gap insurance coverage pays the difference. New car replacement coverage pays for a new vehicle of a similar make and model if it's beyond repair.
How to Lower Your Car Insurance Premium
There are a variety of ways to reduce your car insurance premium. Here are some tips that could help you save money:
Choosing the Right Insurance Plan
Insurance plans and rates vary among providers. Compare the price and inclusions of different plans to make sure they provide the coverage you want without charging for features that don't matter to you. Some companies offer loyalty discounts that can make renewing a policy more appealing. If yours doesn't, you may find a better deal with another insurer who offers a welcome bonus.
Raising Your Deductibles
Many insurers will lower your premium if you raise your collision and comprehensive deductibles. This is especially true if you have a good driving record. However, make sure you can afford a higher deductible out of pocket if you have to file a claim.
Improving Your Credit Score
Insurance companies view drivers with lower credit scores as less financially responsible and a greater risk to insure. Raising your score by a few points can reduce your car insurance rates. You can improve your credit score by:
- Paying your bills on time.
- Paying your credit card balance in full each month.
- Removing inaccuracies from your credit report.
- Limiting requests for new credit.
- Managing any delinquent accounts.
- Consolidating your debts.
Asking for Discounts
Insurance companies offer all sorts of discounts that you may qualify for. If you haven't already, consider moving your homeowner's or renters insurance policy to the company that provides your car insurance to qualify for a bundling discount. You can also get a discount for adding all your household's vehicles to the same policy. If your insurance company has a safe driver program, you can earn a discount by tracking your driving habits with a telematics device or smartphone app. Any teen drivers on your policy may qualify for good student discounts by maintaining a 3.0 GPA or higher.
Maintaining a Clean Driving Record
Obtaining discounts through a safe driver program isn't the only way that maintaining a good driving record can lower the cost of your insurance premiums. Insurance companies reduce your premium if you have a good record, as you're less likely to take risks and get involved in car accidents. They'll consider any moving violations on your record and your claims history when determining your risk level and the cost of your premiums.
Now that you know the factors that can make your car insurance more expensive and how to lower your premiums, you can make more informed decisions when shopping for a new vehicle and car insurance. By doing your due diligence, you can get the best coverage at a reasonable price.
Steven Glass
Insurance Editor
Steve Glass is a retired insurance professional with over 34 years of experience in the Property & Casualty insurance industry. Over the course of his career he led teams that handled Homeowners and Commercial property and casualty claims, Auto Medical claims, Auto Bodily Injury Claims, Catastrophe claims and Insurance Subrogation recovery efforts. He also has experience as an Insurance Subrogation Arbitrator.
