Oregon is the 38th state for car insurance premiums, with the average cost of premiums just $1,306 per year and the lowest insurance cost of any state on the west coast. Of course, individual policy rates may always be higher or lower than the average insurance costs reported but they are a good measure of comparison. Several factors influence the cost of insurance for any specific policy, and taking the time to understand why insurance costs what it does is the first step to obtaining an affordable policy.

How do car insurance companies calculate premiums?

Auto insurance costs vary from one person to the next depending on the type of vehicle insured, a person’s driving record and more. In all cases, car insurance companies charge higher premiums to individuals who have a higher likelihood of being involved in an accident or filing a future claim. However, car insurance companies also charge higher premiums to drivers who live in high risk areas to recover the cost spent on paying other claims in that area.

For example, if a catastrophic weather event happens in an area, car insurance premiums across the state will rise in order to compensate for the cost of claims. This means that even people who were not directly involved in a storm can be affected by weather-related claims. These policy fluctuations are also true of drunk driving, uninsured motorists and other expenses that an insurance company must recover.

Because of this, certain areas will have higher premiums than others despite being nearby. For example, Oregon has a substantially lower number of uninsured drivers than neighboring Washington or California. 11 percent of Oregon drivers are uninsured, whereas 16 percent of drivers in Washington and 18 percent of drivers in California drive without insurance. This lower incidence of uninsured drivers means that an insurance company has a higher likelihood of being able to recover money spent on claims. This accounts for some of the affordable premiums in Oregon.

Another reason that auto insurance is less expensive in Oregon than neighboring states is auto theft. California and Washington are two of the worst states for auto theft in the nation. California especially has six of the top 10 cities for theft, while Washington has two of the remaining four cities. Oregon does not have this high incidence of theft.

Drunk driving has recently plummeted by over 50 percent in the past few years due to harsh DUI laws. In 2011, Oregon had only 77 deaths reported from drunk driving accidents, accounting for 22 percent of all vehicle fatalities. Compared to California, which had several thousand fatalities that year, Oregon is a much lower risk for insurers.

Oregon Car Insurance Requirements

Drivers in Oregon must carry a minimum of $20,000 of property damage liability insurance to pay for property that sustains damage during an accident. They must also maintain $25,000/$50,000 of bodily injury liability coverage per accident, maintain personal injury protection with at least $15,000 coverage and uninsured motorist insurance with the same limits as the liability policy.

The high level of required coverage makes auto insurance more expensive in Oregon than some states, but it also helps to keep the overall cost of insurance down because most drivers have all the coverage that they need. Because more people are able to recover the cost of an accident from their policies alone, insurance will cost less in Oregon than in states where lawsuits are more necessary to obtain medical coverage or protection from uninsured motorists.

In addition to the required coverage, drivers in Oregon have the choice of purchasing full coverage auto insurance. Full coverage includes collision and comprehensive. Vehicles that are being financed must maintain full coverage until the loan has been paid in full; drivers who own their vehicles outright can choose not to carry full coverage insurance if they wish. In addition to collision and comprehensive coverage, drivers can choose to buy rental reimbursement insurance, towing and roadside assistance. These are purchased separately and must be asked for specifically in order to add them to a full coverage policy.

Whether you’re moving to Oregon from another area or simply searching for affordable car insurance where you live, the easiest way to buy a new auto insurance policy is to search online. Obtaining a free quote online is a fast and convenient way to comparison shop between multiple auto insurance companies. By comparing similar policies across several companies, you can decide on a policy that meets your needs without breaking the bank.