[Survey] More Than Half of Americans Think Their Car Insurance Covers This (But They’re Wrong)

When it comes to auto insurance coverage, American drivers are feeling optimistic. We used Google Surveys to question more than 2,000 drivers across the nation about their confidence in accident coverage and satisfaction with policy prices. 

Key survey takeaways 

  • 56% of drivers believe that their insurance will provide full coverage in an at-fault accident 
  • More female drivers (54%) believe their insurance will provide full coverage in an at-fault accident than male drivers (46%)
  • 50% of drivers believe that their insurance premiums are fairly priced
  • More female drivers (55%) believe their insurance premiums are fairly priced than male drivers (45%)
  • 50% of drivers support laws requiring liability insurance

Drivers overly optimistic about accident coverage

If a driver gets into an accident that is their fault, the majority believe that their auto insurance provides full coverage for any damages that occur. 

Over half of drivers (56%) believe that if they are in a car accident that is their fault, their auto insurance will provide full coverage. 

Of course the amount of coverage depends on your policy, but if you do not carry adequate auto insurance for the level of damages incurred in the accident, experts agree you could be personally liable for the costs. 

Gender gap in auto insurance optimism 

Of those drivers, women are more optimistic than their male counterparts about how much coverage their auto insurance provides in accidents that they cause. 54% of female drivers believe that their auto insurance will provide full coverage, compared to 46% of male drivers with the same belief. 

Optimism increases with age

For drivers surveyed, older drivers are more likely to believe that they will have full coverage in an at-fault accident, compared to younger drivers. 

70% of Americans ages 55-64 think their auto insurance will provide full coverage if they are at fault in an accident, compared to only 45% of Americans ages 18-34. 

Full coverage largely depends on the type of auto insurance policy you select. If you only have minimum liability car insurance, you will only have coverage up to a certain point. To ensure full coverage, it’s best to select an auto insurance policy that goes well beyond the minimum requirements. 

Drivers believe auto insurance premiums are fair

When it comes to the cost of auto insurance, most drivers feel that their auto insurance premiums are equitable.

In fact, 50% of respondents characterized their premiums as fairly priced, compared to 31% of drivers who feel that their premiums are too expensive. 

Female drivers more likely to believe auto insurance is fairly priced

55% of female drivers believe their insurance premiums are fairly priced, compared to 45% of male drivers with the same belief. 

This may be because female drivers are less risky drivers than their male equivalents. In 2017, 73% more male drivers died from speeding-related motor vehicle fatalities than female drivers. The same data also indicates that many more men than women die each year in motor vehicle crashes. Male drivers typically drive more than female drivers and also engage in more risky driving practices, such as not using safety belts, driving while impaired by alcohol and speeding. 

Older drivers more likely to feel insurance prices are fair

Survey results indicate that older drivers are more likely to feel their auto insurance is fairly priced when compared to younger drivers.

56% of drivers ages 55-65+ believe their auto insurance policy price is fair. On the other hand, only 44% of drivers ages 18-34 share the same belief. 

Drivers are spending more on car insurance

According to the most recent data on auto insurance, the nationwide average for auto insurance spending rose 17% from 2007 to 2016.

The positive disposition drivers have towards insurance premiums and auto insurance legislation could impact this willingness to purchase insurance that goes beyond the minimum requirements. 

In 2017, 1% of people with liability insurance had a bodily liability claim, while 4% of those with liability insurance had a property damage liability claim, according to the Insurance Information Institute

With such a low frequency of claims, this could indicate that people are willing to pay more for insurance even if the number of their claims is not increasing. 

Who actually pays in a car crash

According to the National Highway Traffic Safety Administration, approximately 7% of all car crash costs are paid from public revenues. Federal revenues account for 6% of total crash costs, while state and local municipalities cover just around 3% of the costs involved.

Private insurances pay just about 54% of all motor vehicle crash costs. Individual crash victims pay around 23% of all costs, while third parties (like uninvolved motorists delayed in traffic, charities and health care providers) pay around 16% of total costs. 

Those not directly involved in crashes pay for nearly three-quarters of total crash costs, mainly through insurance premiums, taxes, and travel delay.

While private insurance does provide coverage for accidents you may be involved in, relying on this coverage exclusively may not be enough. 

States with the highest minimum insurance requirements 

It’s a good thing that most drivers support laws requiring liability insurance because most states across the nation mandate some variation of basic coverage. 

The following states represent those with the highest minimum insurance requirements: 

  1. Maine
  2. Maryland
  3. Minnesota
  4. New York
  5. North Carolina 
  6. Texas

In Maine, the minimum auto insurance coverage required for drivers is: 

  • $50,000 bodily injury per person per accident
  • $100,000 bodily injury for all persons per accident
  • $25,000 property damage liability per accident 

For Maryland drivers, the minimum auto insurance requirements for drivers are:

  • $30,000 bodily injury per person per accident
  • $60,000 bodily injury for all persons per accident 
  • $15,000 property damage liability per accident 
  • $30,000 bodily injury per person per accident for uninsured motorists 
  • $60,000 bodily injury for all persons per accident for uninsured motorists 

In Minnesota, the minimum auto insurance coverage required for drivers is:

  • $30,000 bodily injury per person per accident
  • $60,000 bodily injury for all persons per accident
  • $10,000 property damage liability per accident 
  • $25,000 bodily injury per person per accident for uninsured/underinsured motorists
  • $50,000 bodily injury for all persons per accident for uninsured/underinsured motorists 
  • $40,000 personal injury protection 

For New York drivers, the minimum auto insurance requirements are: 

  • $25,000 bodily injury per person per accident
  • $50,000 bodily injury for all persons per accident
  • $10,000 property damage liability per accident 
  • $50,000 liability for death per person
  • $100,000 liability for death per accident
  • $50,000 personal injury protection 
  • $25,000 bodily injury per person per accident for uninsured motorists
  • $50,000 bodily injury for all persons per accident for uninsured motorists  

In North Carolina, the minimum auto insurance coverage required for drivers is:

  • $30,000 bodily injury per person per accident
  • $60,000 bodily injury for all persons per accident
  • $25,000 property damage liability per accident 
  • $30,000 bodily injury per person per accident for uninsured motorists
  • $60,000 bodily injury for all persons per accident for uninsured motorists 
  • $25,000 property damage liability per accident for uninsured motorists 

For drivers in Texas, the minimum auto insurance minimum auto insurance requirements are: 

  • $30,000 bodily injury per person per accident
  • $60,000 bodily injury for all persons per accident
  • $25,000 property damage liability per accident 

Each of the states above set high limits of car insurance coverage in the event of an accident. For example, if you are involved in an accident that results in bodily injury to yourself in the state of Texas, your coverage will provide you with up to $30,000 per accident.

Regions with the most confidence in coverage

The Simple Dollar’s survey also revealed that American’s in the South and Midwest are more likely to believe their insurance will cover them if they are at fault in an accident. The Northeast region, on the other hand, has the most pessimism about insurance coverage in the U.S.

Average price for minimum coverage is lower in high requirement states

For the states with the highest minimum auto insurance requirements, the average policy prices for minimum coverage are: 

  • Maine: $359
  • Maryland: $710
  • Minnesota: $579
  • New York: $812
  • North Carolina: $347
  • Texas: $465

The nationwide average cost for minimum coverage policies is $937. With most of the states listed above (outside of New York and Minnesota) well below the nationwide average.  

Location is critical when it comes to policy rates. Rates differ from state to state because insurance is regulated at the state level. 

These states may have lower average costs for minimum coverage policies because they have more extensive mandatory protection. But, it should be noted that there are other factors at play when it comes to determining auto insurance rates by state. Conditions like property crime rates, weather, and even wildlife may also impact average rates. 

States with the lowest minimum insurance requirements 

New Hampshire stands out as the only state where car insurance is not mandatory. In fact, there are no minimum car insurance requirements in New Hampshire

But, even without minimum requirements, state law requires drivers to pay for any bodily injury or property damage that results from drivers operating vehicles that they own. 

Florida also ranks as one of the states with the lowest minimum insurance requirements. The minimum auto insurance coverage required for Florida drivers is: 

  • $10,000 personal injury protection 
  • $10,000 property damage liability per accident 

In 2017, the average auto liability claim for property damage was $3,638, while the average auto liability claim for bodily injury was $15,270. Comparing these averages to Florida’s minimum liability requirements, we can see that the cost of these claims on average is well outside what’s covered with minimum liability. Florida drivers may find that purchasing additional insurance, outside of the minimum requirements, is the safest bet for insuring themselves on the road. 

Outside of New Hampshire and Florida, Arizona makes the list with its unique insurance requirements. Arizona requires all drivers to show financial responsibility for damages that could arise in an accident. 

This financial responsibility can be either proof of liability insurance or certificate of deposit of $40,000 assigned to the Office of the Arizona State Treasurer. 

For a lot of drivers, it’s simply much easier to acquire liability insurance in place of a certificate of deposit. If a driver does purchase insurance (instead of a certificate of deposit), the minimum auto insurance requirements are: 

  • $15,000 bodily injury per person per accident 
  • $30,000 bodily injury for all persons per accident 
  • $10,000 property damage liability per accident

Average policy prices for minimum coverage higher in low requirement states

For the states with the lowest minimum auto insurance requirements, the average policy prices for minimum coverage are:

  • Michigan: $2,012
  • Florida: $884

When comparing these policy prices to the national average, $937, we see that these rates are significantly above average. These states may have higher policy costs because they do not have as extensive mandatory coverage requirements. 

Most expensive states for auto insurance also have high average insurance expenditures

Looking at the most recent data on car insurance rates by state, we see that the national average for car insurance is around $1,457. 

In terms of the states that top the charts in terms of car insurance costs, it is reported that the top five most expensive car states for car insurance are: 

  • Michigan: $2,611 average cost
  • Louisiana: $2,298 average cost 
  • Florida: $2,219 average cost 
  • Washington D.C.: $1,876 average cost 

When compared to the national average for car insurance, data indicates that: 

  • Michigan is 79% above the national average
  • Louisiana is 58% above the national average
  • Florida is 52% above the national average
  • Washington D.C. is 29% above the national average 

These states also have some of the highest average expenditures for auto insurance when compared to other states. The average expenditures for auto insurance were:

  • Michigan: $1,270.70 average spending
  • Louisiana: $1,302.11 average spending
  • Florida: $1,259.55 average spending
  • Washington D.C.: $1,246.80 average spending 

This indicates that states where it is more expensive to purchase insurance also experience higher auto insurance spending on average. 

When setting insurance policy rates, insurers review a number of factors to set their premiums. Factors like population density, the number of uninsured drivers, and weather are just a few of the things that go into determining the rates of auto insurance from state to state. 

Due to the specific conditions in each state, drivers may elect to spend more on auto insurance to make sure they are protected wherever they drive. 

Least expensive states for auto insurance also have low average insurance expenditures

Data indicates that states where most drivers are insured and reside in more rural areas had the least expensive auto insurance rates and spend less on average when it comes to auto insurance. 

For example, it is reported that the top 5 least expensive states for car insurance are:

  • Maine: $845 average cost 
  • Wisconsin: $951 average cost 
  • Idaho: $1,040 average cost 
  • Iowa: $1,047 average cost 
  • Virginia: $1,063

When compared to the national average for car insurance, data indicates that: 

  • Maine is 42% below the national average 
  • Wisconsin is 35% below the national average
  • Idaho is 29% below the national average
  • Iowa is 28% below the national average 

The states also have some of the lowest average expenditures for auto insurance when compared to other states. The average expenditures for auto insurance were: 

  • Maine: $650.38 average spending
  • Wisconsin: $688.32 average spending
  • Idaho: $599.77 average spending
  • Iowa: $628.10 average spending 

Conclusion  

If you’re driving a vehicle, or plan on driving a vehicle, you need insurance. While minimum auto insurance coverage gets the job done, it’s important to parse through all your insurance options to find a policy that fits your unique needs. 

If you are considering a new auto insurance policy in your state, we’ve compiled a list of the best car insurance companies of 2019 for you to find the coverage you need at a fair price. 

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