Wrecks, DUIs and low credit scores: Here’s how much they can drive up the cost of your car insurance
Originally published on cnbc.com
The most expensive event is adding a teen driver to your policy, according to a report.
The average annual premium paid by drivers is $1,674, although that can vary greatly among states and individual drivers.
In addition to life events or driving mishaps pushing up the cost, a low credit score may also add to what you pay for coverage.
Ah, the joys of the open road and carefree driving, until something happens that makes it cost even more.
There are events — i.e., accidents, arrests for driving under the influence, a lapse in coverage — that can drive up the cost of your car insurance. By how much? It depends on a variety of factors, including where you live and the infraction or circumstance that causes the premium to spike.
“Drivers in certain parts of the country are paying considerably more for their auto insurance, especially after certain life events,” said certified financial planner Stephen Kates, insurance analyst for Bankrate.
Auto insurance generally eats up a small portion of a person’s budget: an average of 2.4%, according to a report from Bankrate. Part of it depends on the car you drive and your coverage, as well as your driving history — and even your credit score.
The average annual premium paid by drivers is $1,674, although that can vary widely from state to state, the research shows. For instance, the average in Maine is $965, while in Louisiana, it’s $2,724. And even within states, there can be broad variance.
As for how much things like accidents and other incidents can push premiums higher, the most expensive event is adding a teen driver to your policy, according to Bankrate. The average additional cost is $1,662.
Getting just one speeding ticket adds an average of $355 to your annual premium. And that’s on top of the fine that comes with such a violation — which can be several hundred dollars, depending on how fast you’re going and the laws in the jurisdiction where you’re pulled over. Even letting your car insurance lapse can tack on an average of $187 yearly.
Additionally, the better your credit score — which typically falls somewhere between a low of 300 and a high of 850 — the more favorable a rate you can get for insurance, generally speaking. The average annual premium for someone with excellent credit (a score of 800 or above) is $1,487, according to the research. For those with poor credit scores — below 580 — the average is $3,026.