Auto Insurance in a Post-Pandemic World

For nearly a decade, car insurance premiums have steadily increased. That has changed in 2021, with rates dropping slightly — potentially because pandemic shelter-in-place orders have limited the number of drivers on the road.

But while some drivers are paying less, that’s certainly not true for every household. To keep premiums low — without sacrificing financial protection — consumers should understand the major factors that will play a role in their 2021 auto insurance coverage. Insuraroo’s data-driven comparison tools can help.

Unfortunately, car insurance is still an expensive purchase.

According to one estimate from the American Automobile Association (AAA), the average premium for medium sedans was about $1,245 in 2020. The estimate assumes a full-coverage policy for a driver under the age of 65 with a clean record and more than six years of driving experience.
Drivers who shop around in 2021 can often save by taking advantage of differences in premium calculations. Unfortunately, many consumers skip this crucial step.

Factors That Affect Auto Insurance Rates in 2021

Insurance companies use the same basic information to calculate rates. However, they use different methods to calculate risk (the chances that the driver will submit a claim). Some of the most common insurance factors include:

Your Location - Where you park your vehicle matters. Insurance companies will look at accident statistics in your zip code, then make adjustments based on other factors — if you keep your car in a garage, for instance, you might be eligible for a discount. State laws also affect the ways that insurance companies calculate their rates.
Your Vehicle - More expensive vehicles are more likely to submit an expensive claim, so if you drive a luxury vehicle, expect higher rates for comprehensive and collision coverage. A Tesla Model X costs an average of $1,909 per year to insure[ https://www.usatoday.com/story/money/2019/06/29/25-most-expensive-cars-to-insure/39575329/] — well over the national average.

Insurers also look at accident statistics, since drivers who choose certain vehicles are more likely to be risky drivers. In 2020[ https://www.iii.org/article/what-determines-price-my-auto-insurance-policy], SUV and crossovers paid less for insurance on average.
Your Driving Record - Depending on your insurer, a single accident or ticket could cause rates to skyrocket. Safe drivers with extensive driving histories tend to pay the lowest premiums.
How Much You Drive - Some insurance companies offer discounts for vehicles that spend a hefty amount of time in the garage. If your insurer offers discounts for low mileage vehicles, you may be able to reduce your costs (and if your insurance company doesn’t offer this discount, that’s another great reason to shop around).
Your Age and Gender - Younger drivers tend to submit more insurance claims, and women tend to be safer drivers than men. However, California banned the use of gender in auto insurance calculations in 2019[ https://www.washingtonpost.com/transportation/2019/02/11/gender-can-no-longer-be-used-calculate-auto-insurance-rates-california-other-states/], and other states may eventually follow suit.

Car insurance companies also look at credit, coverage options, and other factors to assess risk. Consumers can often cut their costs by raising deductibles or cutting coverage — but this carries significant risk.

Some State Laws Are Changing in 2021

In Michigan, the Michigan Catastrophic Claims Association (MCCA) is reducing its annual fee by $14 per vehicle, and the state no longer requires drivers to purchase unlimited personal injury protection medical coverage.
And in Florida, major legislation is expected to eliminate the state’s unique “no-fault" insurance system. Drivers can expect significantly lower rates — but they’ll need to compare insurance providers while navigating the new insurance laws.
Most states aren’t making major changes to their insurance laws, but drivers should research for themselves (and compare quotes carefully to ensure adequate coverage at a fair price).

So, how can drivers keep their insurance premiums low in 2021?

Regardless of a driver’s history, comparing auto insurance makes sense.

A single search could lead to hundreds of dollars in savings per year — without raising deductibles or reducing coverage limits.

Insuraroo makes insurance comparison easier and more secure. Our AI-enhanced tools collect basic information, then source quotes from reputable providers. By protecting driver information, we provide a private way to find the best possible policy in a matter of minutes.

Whether you’ve had the same policy for years or you’re buying insurance for the first time, it’s important to compare before you buy.

Dozens of factors influence insurance costs, but a quick search can allow you to hit the road with peace of mind (and more money in your walle