What’s the Average Cost of Car Insurance In the US?
Average car insurance cost per state
|State||Cost Range||Car Insurance Annual Premium Cost||Average Car Insurance Cost per Month|
Louisiana drivers pay the highest insurance rate in the country, with an average annual premium of $3,279.18 for full coverage, and $1,487.55 for minimum coverage. Indiana drivers pay the lowest rate, with an average of $1,093.85 a year for full coverage, or just $429.02 for minimum coverage.
In California, for example, the minimum insurance requirements are listed as 15/30/5. That means drivers need to have $15,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident and $5,000 in property damage liability coverage per accident.
Average auto insurance premium per carrier
As you can see below, most major car insurance providers are in the same ballpark for rates, but there are some clear outliers. You’ll get the most expensive full coverage auto insurance premium from Allstate, and the most affordable from USAA.
On the opposite end of the spectrum, Travelers offered the most expensive minimum coverage rate of $815.41, and USAA offers the cheapest rate by far – just $487.04 each year. This makes USAA seem like the obvious choice, but USAA doesn’t provide coverage to just anyone: it has strict military and immediate family restrictions.
|Carrier||Full Coverage Average Cost||Min Coverage Average Cost||Difference|
Average car insurance rates, explained
The U.S. average cost of car insurance is $1,758 per year, but every driver will pay a different rate. Places with a higher population density, lower incomes and a large percentage of uninsured drivers will have a higher average car insurance cost, because the likelihood of filing a claim is higher.
But it doesn’t stop there. People who live in the same city can still have drastically different rates. There is no one-size-fits-all auto insurance rate — it varies from person to person based on many factors, such as:
- Where you live
- The car you drive
- Your driving history
- Education level
- How long you’ve been driving
- Your credit score
- Your driving habits
- The amount of coverage you choose
- The type of coverage you choose
[Read: Guide To Car Insurance 2020]
Car Insurance cost for the 10 most expensive states
State car insurance rates are determined by a number of factors, like the average number of accidents and number of uninsured drivers on the road. This leads Florida to be the most expensive state for minimal coverage — 26.7% of drivers don’t have car insurance. Uninsured drivers create more risk and ultimately increase the price of insurance for everyone. Louisiana offers the most expensive rates for full coverage, with an average annual rate of $3,279.18. One of the reasons why car insurance is so expensive in Louisiana is because the state has one of the highest accident rates. The number of fatal accidents and frequency of collisions in the state is significantly higher than the national average, which leads to higher auto insurance rates.
Most expensive full and minimum coverage cost per state
|State (Full coverage cost)||Average Full Coverage Cost||Average Full Coverage Monthly Cost||State (Minimum coverage cost)||Average Min. Coverage Cost||Average Min. Coverage Monthly Cost|
|1. Louisiana||$3,279||$273||1. Florida||$1,544||$129|
|2. Florida||$3,289||$266||2. Michigan||$1,525||$127|
|3. Maryland||$3,079||$257||3. Maryland||$1,489||$124|
|4. Michigan||$2,730||$227||4. Louisiana||$1,488||$124|
|5. New York||$2,609||$217||5. Rhode Island||$1,445||$120|
|6. Pennsylvania||$2,493||$208||6. Connecticut||$1,309||$109|
|7. New Jersey||$2,471||$206||7. New York||$1,245||$104|
|8. California||$2,417||$201||8. New Jersey||$1,162||$97|
|9. Rhode Island||$2,394||$200||9. Deleware||$1,017||$85|
|10. Colorado||$2,346||$196||10. Nevada||$989||$82|
Car insurance cost for the 10 cheapest states
At an average premium of just over $300 each year, Iowa drivers pay the least amount for minimal coverage –– by a significant amount. Iowa’s low population density is one of the main reasons costs are so low. The majority of the state is made up of “dense rural” areas, rather than urban areas. With fewer drivers on the road, there is less risk of accidents overall. In Indiana, you can get full coverage auto insurance for less than $100 per month. Similar to Iowa, Indiana is so affordable because the state is not densely populated. Lower population translates to less risk and lower prices.
Cheapest full and minimum coverage cost per state
|State (Full coverage rank)||Average Full Coverage Cost||Average Full Coverage Monthly Cost||State (Minimum Coverage rank)||Average Min. Coverage Cost||Average Min. Coverage Monthly Cost|
|1. Idaho||$1,094||$91||1. Iowa||$306||$26|
|2. Maine||$1,242||$103||2. South Dakota||$382||$32|
|3. Hawaii||$1,264||$105||3. North Dakota||$390||$32|
|4. Iowa||$1,275||$106||4. Wyoming||$393||$33|
|5. Vermont||$1,366||$114||5. Nebraska||$412||$34|
|6. Ohio||$1,397||$116||6. Idaho||$429||$36|
|7. Nebraska||$1,397||$116||7. Hawaii||$439||$37|
|8. North Carolina||$1,417||$118||8. Montana||$441||$37|
|9. North Dakota||$1,419||$118||9. Ohio||$462||$38|
|10. New Hampshire||$1,487||$124||10. North Carolina||$482||$40|
Full and minimum coverage average cost per carrier
|Insurance Company||Full Coverage Cost||Full Coverage Monthly Cost||Min. Coverage Cost||Min. Coverage Monthly Cost|
Minimum coverage vs full coverage explained
Every state requires drivers to carry a minimum amount of coverage. But when you purchase car insurance, you’ll have to decide whether to get minimum coverage or full coverage.
Every state’s minimum liability insurance requirements are represented with numbers and slashes. For example, you might see a state’s insurance requirement written as 25/50/10. Here’s what those numbers mean: Required bodily injury liability coverage per person/required bodily injury liability coverage per accident/required personal property injury liability coverage per accident.
Minimum coverage car insurance differs in every state, but it usually includes: bodily injury, liability coverage and property damage liability coverage at a minimum
This is the cheapest coverage you can buy, and you can’t legally carry less than the minimum amount.
Full coverage, on the other hand, is essentially the opposite. It includes coverage above and beyond what the state requires. Full coverage car insurance usually includes: Collision, Comprehensive, Liability (bodily injury and property damage), Uninsured/underinsured motorist coverage, Medical payments coverage.
Drivers can also elect to purchase additional coverage for things like roadside assistance, rental car reimbursement and accident forgiveness.
Full coverage car insurance is more expensive because it offers significantly more protection. However, it’s worth the added cost. If you settle for the state’s minimum insurance requirements, you run the risk of being underinsured.
If you get into a costly accident, there’s no guarantee that you’ll have enough coverage to pay for the full extent of the damages. In that case, you would be financially responsible for paying the difference, which would come out-of-pocket.
Car insurance cost: poor credit vs. good credit
|Carrier||Good Credit Full Coverage Average Cost||Poor Credit Full Coverage Average Cost||Difference|
What factors affect the cost of car insurance?
With varying auto insurance rates across companies, it makes you wonder how they come up with your rates. It isn’t random. Each provider has their own formula that allows them to calculate risk, though the factors are generally the same across companies.
1. Basic demographics
Insurance providers will start with your basic demographic information to calculate your policy. These factors include age, sex, marital status and where you live. Insurance companies have an enormous amount of data that helps them analyze what presents more of less of a risk for filing claims.
Especially for younger drivers, age can have a significant impact on the rate you receive. Young drivers are seen as a bigger risk because of their lack of driving experience. In some cases, they can pay double what an experienced driver would pay.
Age doesn’t only factor one way. While young drivers are perceived to be immature drivers who will likely file a claim, elderly drivers also pose a risk for insurers. With higher crash and injury rates, drivers who are 75 and over will also experience higher rates. The good news is not every state allows insurers to adjust rates based on age. California, Hawaii and Massachusetts all prohibit it and Rhode Island has regulations in place that protect older drivers.
Men who are under 25 will pay the highest insurance premium. Since men cause around 6.1 million car collisions a year and women only cause around 4.4 million, this doesn’t seem that far off. Generally, gender plays the biggest role for young drivers. Once drivers age out of the high-risk age group, things like driving records take over. How big of a part gender plays in your rate will vary across companies.
4. Where you live
Location also has a huge impact on your car insurance rates. In densely populated areas, you’re at higher risk for an accident and will end up paying a higher premium. Areas vulnerable to natural disasters can increase premium costs too, which is why hurricane-prone Louisiana ranks second in the U.S. for insurance rates. It’s worth keeping in mind how big an impact where you live can have on what you pay. Even ZIP codes that aren’t far apart can vary dramatically on average costs.
5. The car you drive
When you were shopping for your car, you probably weren’t thinking about how your selection could impact your rate. However, just as your insurance company assumes you’re more or less of a risk based on your demographics, it assigns risk based on the car you drive, too.
If you drive a sensible family car such as a minivan, sedan or SUV, you probably won’t pay nearly as much as someone who drives a pricey, high-performance sports car. Larger cars are also considered safer than smaller cars because they absorb impact more efficiently in an accident. When it’s time to shop for a car, keep this rule of thumb in mind: The faster the car can go, the higher the risk of a crash and the more you’ll pay. You can also save a bit of money by considering a used car, which will almost always be cheaper to insure than a new one.
Anti-theft devices such as alarms, anti-lock brakes and other safety-focused equipment can also save you some cash in your policy. Though added safety features don’t always translate directly to savings. In fact, you may see your premium go up because it will cost more to fix these features. That said, your insurer may offer some kind of discount for driving a car with safety equipment.
6. Your driving history
Perhaps the most fair factor, your driving history plays a large part in how much you’ll pay for insurance. The at-fault accidents on your record will act as a predictor of risk for future accidents. If you’ve never been in an accident, you might feel like celebrating. But before you do, you should know, your driving history has more than just accidents. The more tickets and violations you have, the higher your rates are going to climb. If you’ve been cited for DUI or reckless driving, your insurance premium could nearly double.
You can’t rewrite the past, but you can be a safer driver going forward. If you have a few marks on your driving record, consider taking a defensive driving course or installing a tracker that records data on your driving habits (mileage, sudden acceleration or deceleration, excessive speed and rough turns). Typically, you won’t be penalized for bad driving, but you could be rewarded for safe driving.
7. Your credit score
You might be wondering: what does my credit score have to do with car insurance? Why should a few financial missteps in your past decide how much you pay? Your credit score has nothing to do with your ability to drive, though it’s still oftentimes considered as a way to determine if you’re likely to file a claim or not. Basing insurance premiums on credit score results in poor Americans generally paying more for car insurance. Using credit scores to assess risk is illegal in a few states (California, Hawaii and Massachusetts), but otherwise, it’s fair game.
There’s no quick fix for bad credit, but raising your credit score will impact more than just your insurance rate. Reduce large balances and making payments on time will push your score in the right direction.
8. Your driving habits
How long is your daily commute? Do you ever use your car for business purposes? Does your car gather dust until the weekend because you use public transportation during the week? Do you park on the street, in a shared lot or in your own private garage? The answers to these questions translate into your level of risk for insurance companies, which will impact the cost of your car insurance premium.
The less you drive, the less of a risk you are for your insurance company. So if you can, consider moving closer to work to reduce your mileage, taking public transportation or carpooling can all help you save money. Be sure to report any such chances to your insurer so that you can reap the benefits.
9. The amount of coverage you choose
The limit of your policy
When you’re shopping for car insurance, there are a couple of numbers that will weigh heavily on what you pay. The first is your limits — the maximum amount your insurance company will pay in the event of a claim. Limits are usually written like this: $50,000/$100,000. That means your insurer will pay up to $50,000 per person and $100,000 per accident.
The state you live in will determine your minimum limit. But that doesn’t mean it’s the right amount of coverage for you, even if sticking with the minimum will save you some money. Taking on additional coverage will make sure you’re covered — no matter the situation.
It’s easy to think that collisions or damage will never happen to you when it comes to additional car insurance. But in the worst case situation, you could potentially lose your savings or even your house, if someone’s medical or property damage bills exceed your ability to pay when you’re at fault. Even if you don’t own a car, coverage such as non-owner car insurance prevents you from the worst case scenarios.
The deductible of your policy
The second number is your deductible. Which is how much you’ll pay out of pocket before your insurance company will step in. A common deductible is $500, but they can go as low as around $100 and as high as $1,000 to $2,000.
Your deductible can be a better place to save. Agreeing to pay $1,000 instead of $100 in the event of a claim can save you a lot of money — but it’s a tactic you should use only if you have that $1,000 stashed away in your emergency fund, ready to pay the bill should you need it.
Be realistic about your needs. You don’t want to overpay for coverage you won’t use, but you also don’t want to skimp and leave yourself on the hook for thousands of dollars after an accident.
10. The type of coverage you choose
Not surprisingly, the more coverage you have, the more you’re going to pay. Bodily injury liability and property damage liability are required when you buy car insurance. There are some other types of coverage that you may be able to skip if they don’t apply to you. Instead of blindly paying for every kind of coverage, carefully evaluate whether it makes sense for your individual situation.
- Personal injury protection (PIP) – Not required in all states, PIP helps pay for your medical bills or your family’s medical bills after a crash. However, it’s probably not necessary if you and your family have adequate health insurance.
- Roadside assistance – Another coverage option, it doesn’t make sense to pay for roadside assistance if you’re already a member of AAA.
- Comprehensive coverage – Required if you’re financing or leasing your car, comprehensive covers theft and damage to your vehicle due to vandalism and other calamities that don’t involve crashes.
- Collision coverage – Also required if you’re financing or leasing a car, collision coverage covers actual crash-related damage to your vehicle.
How can you save on car insurance?
At The Simple Dollar, we know that car insurance can be expensive, and no one wants to overpay for coverage. Most drivers are on a budget, and price is a big priority when shopping for insurance. To help you find coverage that won’t break the bank, we’re offering some budget-friendly tips that can help you save money.
Compare your options
One of the best things you can do to save on car insurance has nothing to do with who you are, where you live, the coverage you select or how you drive. To get the best deal for your circumstances, conduct a car insurance comparison. Each company places different emphasis on the factors listed, so take a look at the average cost to insure a car with each major insurance company to find savings.
Different insurers offer different discounts. Insurers like Geico, State Farm and Progressive are frequently recognized for having cheaper car insurance rates.
Common discounts include:
- Good student savings
- Certain organization membership
- Active duty military
- Bundling other policies with the same company
- Driving a low-risk car
- Infrequent driving
- Having a good credit score
Boost your credit score
Taking the steps to improve your credit score is another way to save money on your car insurance. As an added bonus, it will help reduce costs in other areas like credit card APRs. Start by paying all of your bills on time, checking your credit report for errors and paying down high interest debt. Remember, improving your credit score is a marathon, not a sprint. It will take some time to see your score increase.
Car insurance rates
We used insurance rates from Quadrant Information Services. This includes analyzing thousands of rates from all 50 states that were publicly sourced from 2019 insurer filings. Rates are based on a 30-year-old male or female that had a clean driving record. Full coverage premiums assumed a $500 collision and comprehensive deductible, and we looked at those who had both good and poor credit. These rates should be used to inform your car insurance shopping process, but your own quote may differ.
We welcome your feedback on this article and would love to hear about your experience with the car insurance we recommend. Contact us at firstname.lastname@example.org with comments or questions.