What the Average Car Insurance Cost Per Month Actually Looks Like
The numbers can help. Here are the facts.
For full coverage auto insurance, the national average is around $168 per month, per the Insurance Information Institute, or $2,016 per year. So, $150 per month for car insurance is actually less than that national average. You may not have realized this.
Here is where the national average really doesn't apply to El Paso drivers. Texas as a whole is higher than many other states for car insurance rates. The Texas Department of Insurance reports that the state average for full coverage is about $175 per month, and El Paso drivers typically pay a bit less than rates in Houston, Dallas and many other Texas cities, which we notice when we get quotes for El Paso drivers.
Full Coverage vs. Liability Only
Depending on the type of auto insurance you have matters greatly here. Full coverage is the name given for a policy that includes collision and in addition to liability coverage, as opposed to liability-only insurance which costs much less per month, typically around $50 to $70 or less.
A $150 per month bill for liability-only is a bit of a red flag as a car insurance bill, but $150 monthly for full coverage is very common for El Paso auto insurance.
Here is a good way to think about it:
- In Texas, liability-only coverage typically runs between $40 to $80 per month.
- Full coverage auto insurance costs on average about $140 to $200 per month depending on the driver.
- Extras such as roadside auto assistance and car rental reimbursement may increase the costs a bit.
- Drivers who are under 25 or have been involved in an auto accident in the past may pay more than average.
Where you live within El Paso matters too. Drivers residing in the Westside or Upper Valley can pay different auto insurance premiums than those closer to Downtown or the Lower Valley as different zip codes in El Paso can impact car insurance rates.
Your Payment Isn't Just About the Premium
The monthly amount is usually all people think about when they buy auto insurance. This is understandable, but keep in mind that the deductible has a big impact on your payment. If you have a smaller deductible, you pay a little more per month. A smaller deductible means if you have an accident, you owe less in out-of-pocket expenses.
We commonly see people make the mistake of just buying car insurance based on the cost per month only, not the deductible, then getting in a fender bender on I-10 near the Spaghetti Bowl and suddenly owing a $1,000 or $1,500 deductible before the policy would pay a dime. That "" is immediately eliminated.
The same goes for the opposite scenario. $150 per month with a $250 deductible isn't the same price as $150 per month for a $1,000 deductible. Same monthly cost, totally different protection. Before you assume your car insurance rate is too high, think about what you would pay after an accident. That is the real number. If you don't know what deductible you have on your policy or what your coverage limits are, an insurance consultation will clear that up in about 15 minutes. It's worth knowing exactly what coverage you're getting for that monthly payment. Bottom line? $150 a month for car insurance is not automatically too high. For full coverage auto insurance in El Paso, that is near average. But average does not necessarily mean right for you. Your age, the type of car you drive, your driving history, your zip code near Mesa or Montwood or wherever in the city, everything affects your car insurance rate. The question is not whether $150 is typical. The question is whether you have the right coverage at this price point.
Coverage Type Makes a Big Difference in Determining if $150 Is Fair
Not all car insurance policies cover the same risks. This is the part that most people miss. Two El Paso drivers could both pay $150 a month for car insurance, and one could have a lot more coverage than the other. It really depends on coverage type.
Liability-Only Auto Insurance vs. Full Coverage Auto Insurance
Car insurance that only provides liability is the minimum requirement in Texas. This type of car insurance covers property damage and bodily injury to another person, but it won't pay for repairs to your vehicle. Around $150 a month for a liability-only auto insurance policy should make you sit up and take notice. People with a good driving record usually pay a lot less for this kind of protection.
On the other hand, full coverage auto insurance is a completely different deal. The package combines liability insurance with coverage for damage to your vehicle. Collision insurance will pay for repairs or replacement of your vehicle in case of a wreck, while other coverage will pay for things such as theft or hail, or the cost of fixing your windshield in case a rock shattered it on the way down from I-10. In El Paso, both hail and sun damage are fairly common. Consequently, $150 a month for a full coverage auto insurance policy might actually seem like a good price on some occasions, depending on your vehicle and your driving history.
What Makes Car Insurance More Expensive or Cheaper?
We get this question quite a bit. Someone will come to the insurance shop confused as to why their neighbor's car insurance rate is lower than theirs. Here are the main factors at work:
- The deductible you chose. If you went with a $500 deductible, you'll pay more for your monthly premium than you would with a $1,000 deductible. A smaller deductible means the insurance company is on the hook for more, so they will charge you more.
- Extra benefits, such as auto roadside assistance or rental reimbursement coverage. These add-ons will increase your monthly rate somewhat.
- Uninsured motorist car insurance. A relatively high percentage of drivers in Texas lack car insurance. In fact, the Insurance Research Council estimates around 14% of Texas drivers are not properly covered. Purchasing uninsured driver protection raises your rate but safeguards you against the errors of other negligent drivers.
- Medical payments coverage or personal injury protection insurance. This pays for medical expenses no matter who is responsible for the accident.
Each layer of coverage costs money. But each layer also gives you real protection. So the real question to ask isn't "Am I paying too much?", but rather "Am I actually getting value for this money?"
A Real Example From Our Office
As one recent example, a client who lives near Cielo Vista walked in our office last month. She thought she had full coverage auto insurance, but her policy stated that she only had liability plus. That means that she'd be paying out of pocket if she had just one accident. We were able to adjust her rate to carry actual full coverage auto insurance without making her bill any higher simply by asking her to raise her deductible just a bit.
She walked away with better protection at almost the same price as before. It's more common than you might expect.
The thing is, most people won't discover their coverage gaps until they actually file an insurance claim. And, by that point, it's too late to fix them.
What I am getting at is this. If you've got full coverage auto insurance with a low deductible, you have uninsured motorist protection and roadside auto assistance, plus a newer car, then paying $150 a month for your insurance is completely fair. But if you're on an older car with just basic liability protection, then yes, $150 will definitely seem high.
The way to know for sure is to pull out your declarations page. This is the one-page document that lists every coverage you carry on your policy along with your dollar limit. If you don't have it close by or if it's confusing, bring it in and we'll go through it line by line as part of your complimentary insurance consultation. You can go here to learn more about auto insurance or give us a call anytime.
Key Factors That Are Raising Your Rate Above The Average
Your car insurance rate isn't a random number. It's made up of a bunch of different details about you, and some of them matter a lot more than you'd expect. There's always a reason for that monthly bill. Let's take a look at what is driving your rate higher.
Your Driving Record
The first thing is the driving record. Even a single at-fault accident is going to raise your rate for three to five years. The same goes for getting a ticket for speeding, running a red light, and even having lapsed coverage for a time even years ago. All those things will show up. I'll talk to folks near Cielo Vista that are shocked their rate went up after one fender bender at an intersection on Gateway West. But that's the way the math works. They're trying to gauge how risky a car driver you are.
Here's another thing most people don't know. A DUI or even just getting a charge for reckless driving won't just add a little to your bill. It can literally double it.
Your Age and How Long You've Been Driving
A younger driver will always pay more. Younger drivers in under 25 are usually charged higher auto premiums due to less driving experience, even for drivers with clean records. And so are drivers age 65 and over. Your auto premiums are usually lowest somewhere between 30 and 60.
What you drive
The cost of repairing a newer SUV equipped with higher end parts is greater, which means it costs more to insure. Sports cars are considered to get driven at higher speeds. Your car's safety rating is another factor. We often hear this one from customers who recently purchased a truck at a dealership; and, they can't understand why their auto rate has increased because the car itself now impacts the rate.
Your credit-based insurance score
The State of Texas allows the use of a credit-based insurance score when determining your rates. According to the Texas Department of Insurance, this score is based on "payment history and the amount of debt you currently have." It is not the same score as your credit score, but it is related. If it's lower than it used to be, your premium could be higher, even if you haven't had an accident in years.
In short, if you've experienced financial difficulties recently, you might be paying for it now in your auto insurance rate.
Where you leave your vehicle when you go to sleep
Your zip code plays a significant role in your auto rate. If you live in a higher density area, like the Eastside or a neighborhood near I-10, you're in an area where more insurance claims are filed. The more claims filed in a zip code area, the higher the auto premium for all those who live there.
It may not seem fair, but auto insurance companies use statistics to calculate the probability of claims based on where you reside; and, it does cost your wallet the same. If your car break-ins are higher than average, it affects your rate as well.
The level of coverage you select
There is a big difference between Texas's minimum liability auto insurance and "full" coverage auto insurance. Choosing to carry collision, gap coverage, low deductibles, etc., could increase your monthly payment. But there's nothing wrong with that. It means you're better protected. Your friend with the same car may have lower premiums because they are insured to the state of Texas's minimum requirements only.
Here are some factors that might keep a driver's auto insurance rate in El Paso higher than average:
- At-fault accidents or moving violations in the last 3 to 5 years
- Driving a high-value, or performance car
- Under the age of 25 or a new driver
- Having a low credit-based insurance score
- Living in a zip code with a history of a high number of claims or thefts
None of these are reason enough to pay $150 per month, but put any combination of two or three of them together, it is very easy to understand the higher auto insurance premium. But is that amount of coverage appropriate for your car insurance policy? If you're not sure how your auto insurance policy rate is constructed, or if you feel it's too high, an insurance review may be the next step. We'd love to help you find out what factors could be influencing your rates, and, how to lower them.