The Average Cost of Car Insurance in the US - 2021 Update
(Research & Study by Experts)
Looking for the average cost of car insurance? We at Carsurance have you covered. We’ve conducted detailed research to get you the most accurate results on the web. Want to know the lowest and the highest rates in your location? Check out our interactive map.
And if you don’t want to miss all of the astonishing facts on car insurance rates, check out the infographic below. It’s a fun way to understand how insurance companies rate their risks.
Once you master that, you will know how to become the most desirable customer for any insurer. By doing so, you will qualify for various discounts and pay the lowest car insurance premium.
What’s the Average Cost of Car Insurance in the US?
$1,502 annually and $751 per six months—that was the average price in the United States as of December 2019—up from $1,469 annually and $735 per six months during March of the same year. Based on this trend, one could expect that the car insurance rate is set to increase further in 2020. The available data was based on the costs for all age and risk groups. Rates have experienced a 20% inflation since 2011. This increase wasn’t evenly spread across the US. Some states saw a huge 62% rise, while others experience a negligible 1% hike.
What Is the Average Car Insurance Cost by State?
One of the most significant determinants of car insurance prices is your home state.
Michigan is the most expensive, with an average yearly premium of $3,466, while Maine is the cheapest at $1,062. The main culprits for high prices in any state are the presence of a no-fault insurance system, a high population density, and frequent car accidents. Additionally, a high theft rate or a significant potential for natural disasters increases comprehensive coverage.
Your zip code is another significant factor. Based on our experience, densely populated cities, with a high average income and frequent traffic jams tend to have the highest car insurance prices. For example, State Farm charges $261 monthly for a 40-year-old driver with a clean record in Los Angeles. The same driver pays only $186 for in San Diego.
The 10 Most Expensive States for Car Insurance in 2020
1. Michigan: $3,466 Average Annual Premium
Michigan is by far the most expensive state for auto insurance in the US. Two factors make the prices skyrocket. The first is the mandatory PIP coverage with no maximum limit. The second is the lack of strict regulations for medical care fees. This enables medical providers to exploit the system and charge considerably more for PIP-related injuries than for regular ones.
That’s why the average injury-related claims expense in Michigan were $75,600 in 2013. For comparison, the second most expensive state was New Jersey, with an average of $13,630.
Consequently, insurance companies have to increase their premiums significantly just to stay in business. Some major insurers, such as State Farm, even left the Michigan auto insurance market.
2. Louisiana: $2,608 Average Annual Premium
Louisiana has the third most fatalities per 100,000 miles driven in the US. Additionally, the state has relatively poor roads, and the competition between the various insurance companies is weak. These factors keep prices high.
3. Nevada: $2,486 Average Annual Premium
The increasing frequency of car accidents and the booming population in this state (particularly in Las Vegas) have significantly contributed to the soaring car insurance rates. Although Nevada is not known for harsh weather conditions, the state still experiences sandstorms that could lead to auto accidents.
4. Kentucky: $2,385 Average Annual Premium
Just like Nevada, Kentucy is another newcomer to our list. Kentucky has much more expensive car insurance rates than the others because of their auto insurance laws. Although the state doesn’t require its drivers to get underinsured coverage, their minimum auto insurance requirements inlcude personaly injury protection.
5. DC: $2,187 Average Annual Premium
The main reason for expensive insurance in Washington DC is its high population density. For instance, DC’s population density is greater than that of Los Angeles or Houston. This increases the chances of an auto accident or theft happening.
6. Florida: $2,178 Average Annual Premium
From number three, Florida was pushed to sixth spot of the most expensive states for car insurance. It remains as one of the areas with the highest number of uninsured drivers in the US. Furthermore, Florida has frequent car accidents, a high number of senior drivers, and a no-fault system—not to mention significant medical claims expenses. On top of that, Florida’s tropical storms often damage cars covered under comprehensive. Given all these factors, it’s not surprising that the premiums are so high in Florida.
7. California: $2,135 Average Annual Premium
California is a prosperous state with numerous high-end cars. Furthermore, it’s eleventh in the US in terms of population density. That’s why it’s no surprise auto insurance is expensive in this state.
8. Rhode Island: $2,092 Average Annual Premium
The two main factors that push the prices up in Rhode Island are the state’s considerable number of uninsured drivers and its costly repair facilities. Furthermore, the average annual income in Rhode Island is above the US average. This makes the cost of running a business in the state higher, which in turn drives the rates up.
9. New York: $2,081 Average Annual Premium
NYC is the most populous city in the US and 6th overall by population density. Furthermore, the state of New York is a prosperous and densely populated state with many students and young drivers. Given all these factors, it’s surprising that New York isn’t even higher on this list.
10. Connecticut: $2,010 Average Annual Premium
Similar to other states, car insurance rates in Connecticut are influenced by car type, driving record, zip code, and claims. However, the rates in this state is much higher than the others because the cost of living in Connecticut is expensive. The high rate of uninsured drivers in the state also contributes to the insurance premiums hike.
The 10 Cheapest States for Car Insurance in 2020
1. Maine: $1,062 Average Annual Premium
Maine remains the cheapest state for car insurance for two consecutive years. Last year, the state reportedly had $845 annual premium on average — a $217 difference. Maine is the 33rd state in the US in terms of average income and 38th in terms of population density. That’s why it won’t surprise anyone that insurance is affordable in Maine.
2. New Hampshire: $1,070 Average Annual Premium
New Hampshire is among the US states that don’t require you to purchase car insurance. However, if you choose that option, you’ll practically have to spend your entire savings if an accident happens. Perhaps the main reason for low auto insurance prices in New Hampshire are the really low repair costs.
3. Virginia: $1,194 Average Annual Premium
Virginia has surprisingly low rates compared to the average income, and the rate of uninsured drivers in this state is below average. Cheap repair shops and the fact that car insurance isn’t mandatory in this state could explain this phenomenon.
4. Ohio: $1,197 Average Annual Premium
Ohio is an at-fault state and provides the standard minimum insurance requirements, which together support the state’s affordable coverages. Add the highly competitive auto insurance market, and it’s no surprise Ohio is an inexpensive state.
5. Idaho: $1,269 Average Annual Premium
Idaho has a very low percentage of uninsured drivers. Furthermore, it’s 99% rural land, which decreases the chances of auto accidents and vehicle theft. That’s why finding a bargain deal in this state shouldn’t be rocket science.
6. Indiana: $1,270 Average Annual Premium
Car insurance rates in Indiana are generally inexpensive. However, premiums still vary from one insurance company to another so it’s best to compare auto insurance rates in Indiana to get the lowest price possible. Overall driving safety isn’t so bad in this state either, and perhaps that’s one reason why premiums here are lower than the national average.
7. Wisconsin: $1,320 Average Annual Premium
The setting of That ‘70s Show, Wisconsin improved went down four spots compared to 2019. Severe snow and tornadoes aren’t a rarity in Wisconsin, and during springtime, rising rivers often cause flooding. Additionally, the state holds 25th place in terms of population density. All these factors indicate that car insurance prices should be near the US average. Perhaps it’s the strong competition among insurers that keeps rates in check.
8. Iowa: $1,360 Average Annual Premium
Iowa is an at-fault state with an annual income near the US average and a low number of uninsured drivers. That’s why it is not surprising that its premiums are also below the US average.
9. Vermont: $1,374 Average Annual Premium
Vermont has a low number of uninsured drivers and a low population density. Furthermore, vehicle theft rates are lower than the US average. These factors reduce claims expenses and enable insurers to offer very competitive prices.
10. North Carolina: $1,425 Average Annual Premium
The Tar Heel State is largely rural, which decreases the chances of a car accident or theft. Furthermore, the state’s insurance commissioner has the power to cap car insurance premiums. Combine these two factors with strong competition among insurers, and it’s no surprise policies are so affordable in North Carolina.
Hover the map to find the cost of car insurace in that State
How Much Are You Paying for Car Insurance?
The Average Cost of Car Insurance in the US
Average Cost of Car Insurance by Age
The rates vary significantly based on a driver’s age. A 16-year-old will likely pay four times more than an experienced driver in their thirties. The insurance prices are the lowest for drivers in their fifties. Once a person hits their late seventies, the rates will start increasing again.
Cost of Car Insurance by Gender
Men and women pay almost the same for auto insurance. The difference in most states is 1% on average. However, there is a noticeable difference in average auto insurance prices for younger drivers. A male 16-year-old is expected to pay around $770 more annually than his female counterpart. The statistics justify this pricing strategy. Women cause only 22% of all fatal accidents, they are 10% less likely to get a speeding ticket, and they represent only 24% of individuals with DUI charges. Nonetheless, some states like California, Hawaii, and Massachusetts banned gender-based pricing.
Auto Insurance Cost by Vehicle
The vehicle type can influence the final rates by up to 25%. Vans are the cheapest vehicles to insure, with an average yearly premium of $1,487. Sedans and Luxury cars, such as Tesla’s or Acura’s models, are the most expensive, costing $1,729 and $2,017 annually. The more lavish the interior, the higher the actual cash value of the car. Insurance companies have to take this into account to protect their profits.
Your car make and model obviously have a significant influence on the automobile insurance cost. The more expensive vehicles, like Mercedes and Porches, will automatically command higher premiums if you choose collision coverage. Furthermore, insurance companies have detailed information on the reliability and safety ratings of all vehicle models, and they adjust their rates based on this.
Cost of Car Insurance by Company
In our search for the best car insurance company, we saw that price varies significantly based on the insurer. Progressive, Geico, Auto-Owners, and USAA constantly had the lowest average cost of car insurance per month. On the other hand, companies like State Farm, American Family, Farmers, and Nationwide tend to have higher premiums. If you want to be sure that you are getting the cheapest coverage, request quotes from the most affordable companies only. Furthermore, there’s no compromise in opting for a budget option. We found no correlation between the price and the quality of insurance.
How to Get the Best Car Insurance Prices (Expert Tips)
Check out the infographic to find more interesting facts on car insurance prices. It will help prepare you when you start shopping for the best auto insurance. However, the cheapest coverage isn’t always the best. Other factors, like the quality of customer service, the company’s financial strength, and the number of optional coverages and discounts all determine the quality of auto insurance.
You can check our ratings of all the major US insurance companies in our auto insurance reviews. It will help you make a shortlist of the best insurance companies for your profile. Once you’ve done that, request a quote from at least five companies, compare auto insurance offers, and choose the one that you like the most. That’s the road to finding the best car insurance—it’s that easy.
To calculate the car insurance average cost, we requested a quote from all the major US companies for a 21-year-old, 40-year-old, and 70-year-old driver. We conducted our research in multiple states, like California, Florida, New York, New Jersey, and many others. Our reference driver had a clean record and chose to purchase collision and comprehensive coverage with a $500 deductible.
Frequently Asked Questions
1. Is full coverage car insurance worth it?
Yes, full coverage insurance is generally a smart choice. It provides considerably more protection than liability-only coverage. For example, it reimburser your medical bills and the damage to your vehicle regardless of fault. Additionally, it protects you against drivers with insufficient insurance or no insurance at all. There’s no top-quality car insurance without protection plans that make up full coverage.
The only circumstance where you should drop collision and comprehensive coverages is if your car is old enough that it is rather cheap to repair or replace.
2. At what age does car insurance get cheaper?
Typically, at the age of 18, premiums started to decline rapidly. For instance, in our study on auto insurance for new drivers, the average premium for a 16-year-old was $1,072 per month, for an 18-year-old it was $789, and for a 21-year-old it was $430.
3. Who has the most affordable car insurance?
There’s no clear-cut answer to this question. We always advise comparing quotes from various insurers to determine which is the cheapest company for your profile. Because a myriad of factors influences the prices, that’s the only way to find a tailored-made bargain deal.
Nonetheless, Geico, Progressive, Erie, Farmers, USAA, and Mercury are usually stand out as the most affordable options in our studies.
4. Is Geico the cheapest car insurance?
Based on multiple quote comparison we did on our state-wide studies, GEICO is really among the cheapest companies in the US. Progressive, Farmers, USAA, Mercury, and Erie are other deserving candidates for budget-conscious drivers.
5. What is the cheapest car insurance?
The minimum coverage mandated by your home state, bought from an affordable insurer such as Progressive, GEICO, or Erie, will be the most affordable.
Nevertheless, the cheapest insurance is not always the best. We advise purchasing a policy with higher limits and studying insurance rankings to discover which company provides the best customer service and financial strength.