What’s the Average Cost of Car Insurance In the US? | The Simple Dollar

What's the Average Cost of Car Insurance In the US? | The Simple Dollar

When it comes to shopping around for car insurance, it can be difficult to figure out the pricing structure. Part of the issue is that the price varies significantly by where you live, the minimum coverage requirements and a number of other factors. 

The average cost of car insurance in the United States is $1,758 per year, for example, which works out to about $146.50 per month. In Florida, the average monthly cost is 29% higher than the national average. A car insurance policy in Alaska, on the other hand, will cost you much less on average, at just $77.88 per month.

The state you live in isn’t the only determining factor, either. The price of your car insurance will also depend on your age, the type of coverage, your driving history and even the type of car you drive. Given the wide range of costs for car insurance policies, you need to know what the average in your state is to make sure you’re getting the best deal. If you’re asking yourself the question, “How much does car insurance cost where I live?” — we have you covered.

Car Insurance Rates

Research Methodology

The Simple Dollar analyzed millions of car insurance rates in every U.S. ZIP code to determine the average cost by state, carrier, coverage amount, credit score, and other factors from Coverage.com. 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, 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 based on your unique driving profile.

Average car insurance cost per state

State Cost Range Car Insurance Annual Premium Cost Average Car Insurance Cost per Month
Alaska $285–$2,667 $934.58 $77.88
Alabama $312–$3,699 $1,061.37 $88.45
Arkansas $251–$4,096 $1,259.55 $104.96
Arizona $446–$7,819 $1,683.31 $140.28
California $310–$7,101 $1,764.72 $147.06
Colorado $205–$4,418 $1,490.18 $124.18
Connecticut $615–$6,069 $1,758.12 $146.51
Delaware $221–$6,819 $1,464.92 $122.08
Florida $627–$6,543 $2,297.81 $191.48
Georgia $381–$7,584 $1,573.82 $131.15
Hawaii $320–$2,070 $851.80 $70.98
Iowa $162–$2,134 $790.84 $65.90
Idaho $196–$2,149 $761.43 $63.45
Illinois $269–$6,268 $1,318.54 $109.88
Indiana $179–$5,710 $1,019.20 $84.93
Kansas $210–$6,094 $1,317.93 $109.83
Kentucky $262–$4,892 $1,324.80 $110.40
Louisiana $650–$7,039 $2,084.76 $173.73
Massachusetts $215–$2,926 $1,263.98 $105.33
Maryland $508–$7,338 $2,283.76 $190.31
Maine $143–$2,680 $799.61 $66.63
Michigan $326–$6,922 $2,116.98 $176.42
Minnesota $409–$4,436 $1,605.27 $133.77
Missouri $191–$4,496 $1,275.46 $106.29
Mississippi $249–$3,428 $1,236.67 $103.06
Montana $144–$6,329 $1,079.49 $89.96
North Carolina $295–$1,882 $949.51 $79.13
North Dakota $163–$4,150 $904.31 $75.36
Nebraska $199–$2,556 $904.51 $75.38
New Hampshire $328–$4,033 $1,144.71 $95.39
New Jersey $381–$5,515 $1,816.61 $151.38
New Mexico $224–$2,546 $1,023.25 $85.27
Nevada $205–$6,229 $1,626.39 $135.53
New York $204–$7,329 $1,911.71 $159.31
Ohio $209–$4,780 $929.16 $77.43
Oklahoma $280–$5,293 $1,364.11 $113.68
Oregon $324–$4,326 $1,177.60 $98.13
Pennsylvania $210–$7,021 $1,590.88 $132.57
Rhode Island $611–$4,618 $1,919.50 $159.96
South Carolina $312–$5,373 $1,346.92 $112.24
South Dakota $214–$2,896 $1,245.76 $103.81
Tennessee $266–$3,438 $1,136.87 $94.74
Texas $316–$4,190 $1,464.02 $122.00
Utah $238–$3,358 $1,136.70 $94.73
Virginia $283–$4,323 $1,154.30 $96.19
Vermont $379–$2,679 $1,114.33 $92.86
Washington $293–$3,023 $1,133.42 $94.45
Wisconsin $162–$3,609 $1,021.02 $85.08
West Virginia $280–$3,387 $1,093.04 $91.09
Wyoming $198–$3,035 $1,113.90 $92.83

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 Full Coverage Monthly Cost Min Coverage Average Cost Min. Coverage Monthly Cost
Allstate $2,457.21 $205 $800.53 $67
American Family $1,728.63 $144 $813.48 $68
Farmers $1,534.08 $128 $614.64 $51
Geico $1,336.58 $111 $568.88 $47
Nationwide $1,379.07 $115 $830.00 $69
Progressive $1,915.07 $160 $742.80 $62
State Farm $1,902.69 $159 $801.81 $67
Travelers $1,952.91 $163 $815.41 $68
USAA $1,178.28 $98 $487.04 $41

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:

  • Age
  • Gender
  • Where you live
  • The car you drive
  • Your driving history
  • Education level
  • Profession
  • 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]

What factors affect the cost of car insurance?

There’s no question that car insurance is expensive, and unlike other types of insurance such as homeowners insurance, it is mandated in every state except Virginia and New Hampshire (though New Hampshire mandates it under certain circumstances). But how can you estimate your monthly or yearly costs, and how do you know if you’re getting the best car insurance? As of 2020, the average cost of car insurance in the United States is $1,555 per year or about $129.58 per month. But this is impacted by a long list of factors, from your gender to your geographic location. Here’s what you need to know.

1. Where you live

Car insurance rates vary dramatically by state and even ZIP code. The most expensive state is Louisiana, at $3,279.18 per year for full coverage or $1,487.55 per year for minimum coverage. On the other hand, the least expensive state is Indiana, where drivers pay just $1,093.85 annually for full coverage or $429.02 annually for minimum coverage. 

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. Delaware $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

2. Auto insurance coverage

The amount of coverage you choose

Though every state sets its own regulations, there is a minimum amount of insurance you must carry in each of the 48 states that require car insurance. You can choose to carry higher limits, which will result in a higher premium. You will see coverage amounts listed as three numbers separated by slashes, such as 30/50/30. These numbers represent, in order, bodily injury liability per person, bodily injury liability per accident and property damage liability per accident, in thousands of dollars. So 30/50/30 insurance covers $30,000 of bodily injury per person, $50,000 of bodily injury per accident and $30,000 of property damage per accident.

The type of coverage you choose

You can also choose to add collision and/or comprehensive coverage to your policy to create “full coverage.” While minimum coverage only protects you against liability claims from others, full coverage also protects your vehicle. Collision coverage, as the name suggests, protects your vehicle when it collides with another vehicle, building or other objects. Comprehensive coverage protects your vehicle in non-collision incidents, such as theft or a natural disaster. 

Not everyone needs full coverage. Here are some things to consider if full coverage is right for you:

  • Older vehicles may not need full coverage since the deductible could be higher than the value of the car.
  • Full coverage may not be worth it if you rarely drive and have little to no history of accidents.
  • If you have a lease or a car loan, check with your lender. You may be required to maintain full coverage.

Your policy limits and deductible will fine-tune your car insurance costs, whether you choose minimum or full coverage. The policy limits are how much the insurance company will pay for each type of incident. The deductible is how much you are responsible for paying before the insurance company starts to pay.

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.

3. Your credit score

Your credit score can have a massive impact on your car insurance rates, regardless of other factors. Only three states — California, Hawaii and Massachusetts — ban insurers from factoring in credit score, while in many states your rates could more than double if your credit is poor.

Car insurance cost: poor credit vs. good credit

Carrier Good Credit Full Coverage Average Cost Poor Credit Full Coverage Average Cost Difference
Allstate $2,457.21 $3,528.41 $1,071.19
American Family $1,728.63 $2,897.22 $1,168.59
Farmers $1,534.08 $2,560.31 $1,026.23
Geico $1,336.58 $2,197.10 $860.52
Nationwide $1,379.07 $1,931.89 $552.82
Progressive $1,915.07 $2,976.39 $1,061.32
State Farm $1,902.69 $2,701.59 $798.90
Travelers $1,952.91 $2,635.82 $682.91
USAA $1,178.28 $3,486.49 $2,308.21
Average Difference     $1,058.96

Need to boost your credit score and improve your car insurance rates?

  • Become an authorized user on someone else’s credit card (if they have good credit).
  • Pay down at least one balance or request a limit increase. Either will give you points for having more available credit.

4. Basic demographics

Even your basic demographics can have a strong impact on your car insurance costs. Most (though not all) states allow drivers to be rated based on:

  • Age: Younger drivers and those over age 75 generally pay more.
  • Gender: Among drivers under age 25, men typically pay more than women — this discrepancy tends to go away for more experienced drivers.
  • Marital status: Married people are considered lower risk, and thus tend to pay less for car insurance.

5. The car you drive

Which car you choose can have a surprisingly big effect on your insurance rates.

Less expensive to insure

  • Big vehicles
  • Family vehicles such as SUVs or sedans

More expensive to insure

  • Small cars
  • Sports cars, especially those that are considered high-performance

6. Your driving history

As you might expect, insurance companies don’t particularly like paying claims. So if your driving history is poor, you can expect higher premiums. In order of costliness, some things that could raise your rates include:

7. Your driving habits

Statistically, the more you drive, the more likely you are to get into an accident. Likewise, parking on the street is more likely to result in damage than parking in your own garage. To save money on car insurance, consider:

  • Taking public transportation to work
  • Reducing your commute
  • Carpooling
  • Paying for off-street parking

8. The carrier you choose

Of course, all insurance carriers are free to set their own prices. Some carriers offer discounts for which you might qualify, such as safe driving bonuses or discounts for military families, and some may rate your particular risk level lower than others. So it always pays to shop around.

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.

[Read: Car Insurance Rates Are Up – Here Are Eight Ways to Get Yours Back Down]

Car insurance cost FAQs

It varies by state, but in general, you can expect to need coverage for bodily injury liability, property damage liability and uninsured/underinsured motorist protection. States like New Hampshire don’t require car insurance, though additional requirements are in place.

It depends on a few factors. You should consider the likelihood of your car being damaged (based on your area, your vehicle’s age and similar factors) and your ability to pay for repairs if damages were to occur. Also think about how often you drive. From the start, driving more will put you at a higher risk for an accident.

After an at-fault accident, you can expect to see a 42% rise in your premium, according to data from InsuranceQuotes and Quadrant Information Services. Unfortunately, these rates were measured from people with relatively clean driving histories. If you have a less-than-perfect record, you may be subject to even higher premium increases. How much your rate will increase will depend on the claim type, if you were at fault, your carrier and what state the accident took place in.

We welcome your feedback on this article and would love to hear about your experience with the car insurance we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source link


Please enter your comment!
Please enter your name here