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How Much Is Car Insurance? (Updated In 2024)
Pete Ortiz
Last updated:
Americans love to drive. A robust highway system, sprawling cities, and the lack of national public transportation have created a strong car culture in the US. There are over 276 million cars in the United States. All of those cars legally need to be insured to be on the road. Car insurance can be a hefty additional cost to owning a vehicle and needs to be taken into consideration when buying a new car or looking for a new insurer.
How much does car insurance cost in the United States this year? It turns out it costs quite a lot. The average cost for annual full-coverage auto insurance in the United States is $1,775. That factors to $148 per month for full coverage.
This comprehensive overview will go over the average price for car insurance nationwide, differences in price for different coverages, regional pricing, and the factors that most heavily affect your final quote. By the end, you will have a good idea of what your fellow Americans pay to keep their cars on the road.
The Average Cost of Car Insurance In the USA
These numbers are derived from current rates and data taken from drivers across all 50 states. The average cost for minimum insurance coverage in the United States is $545 per year, which breaks down to just $45 per month.
Minimum coverage is good enough to keep your car on the road but rarely offers good protection in case of a serious accident. There are a large number of local and national car insurance companies that cater to drivers that simply want to keep minimum insurance coverage on their vehicles in order to save money and keep their cars legal.
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Different States, Different Requirements
It is important to note that every state has different requirements for auto insurance. Full coverage is the same between states, but the required minimum insurance coverage is different everywhere. Some states might have lower insurance rates because they require different types of insurance to keep cars on the road. States with higher minimum requirements will have higher minimum coverage costs.
Every state requires drivers to carry some sort of auto insurance, but the specifics differ from state to state. Some states simply require basic liability insurance, while others require different levels of liability, collision, and property protection. Be sure to double-check your specific state’s requirements for minimum auto insurance while doing your research.
Average Cost of Car Insurance By Region
We took the state data and compiled it into a helpful regional price chart. The following information breaks down the average cost for auto insurance based on what region of the country you may or may not live in. This is a great way to glance at and get an idea of typical auto insurance costs. For the most accurate information, you ideally need to get a quote from a local insurance agent.
Full Coverage
Minimum Coverage
Average Annual Cost
Average Monthly Cost
Northeast
$1,758
$611
$1,185
$99
Southeast
$2,211
$556
$1,383
$115
Midwest
$1,543
$508
$1,025
$85
Southwest
$1,690
$485
$1,087
$91
West
$1,673
$568
$1,120
$94
The southeast United States features the most expensive auto insurance rates. That is because Florida and Louisiana both have higher than average costs. Both states have annual costs that are more than $1,000 higher than the national average. Part of the reason for that is the prevalence of natural disasters in these states. Florida and Louisiana have high rates of hurricanes, flooding, and severe thunderstorms. These events can damage cars leading to a strain on the insurance companies. For example, Hurricane Harvey, which struck Houston in 2017, damaged or destroyed a million cars.
The lowest average cost for car insurance can be found in the Midwest. Midwesterners can expect to pay just $85 per month for car insurance. That is in spite of having Michigan in their region. Michigan has some of the most expensive auto insurance rates in the country. The low rates are driven by states like Iowa and Ohio, which rank in the bottom five for comprehensive collision costs nationwide.
Other than the southeast, most of the regions in the United States have very similar auto insurance rates when blended. Individual states and individual cities can have dramatically higher (or lower) costs depending on a large number of different factors. Three of the five regions have average monthly costs that range from $91 to $99, which is very consistent.
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Most Expensive and Least Expensive States for Auto Insurance
The most expensive state for auto insurance on average is Michigan. Michigan tops the list for both the highest average cost for full coverage insurance and the highest average cost for minimum insurance. Michigan tops the list for a number of reasons. First, it has a high rate of fatal accidents.
Second, Michigan has extremely stringent regulations for car insurance companies. These regulations make it, so insurance companies cannot use non-driving factors to calculate prices. That means things like zip code and credit score cannot be used like they are in many other states. Having to generalize to a greater degree has led to a general increase in rates throughout the state.
The second most expensive state for car insurance is New York, followed by Louisiana and Florida.
The cheapest states for auto insurance include Iowa and Maine. Maine has the cheapest rates for annual full coverage insurance coming in at less than $600 per year. That makes Maine roughly a third the cost of the national average. The second cheapest state for annual full coverage rates is Idaho. Iowa is the cheapest state for average minimum insurance costs and the third cheapest state for annual full coverage insurance costs.
Things That Will Affect Your Insurance Costs
Age
Age is one of the hard and fast rules for auto insurance. The younger the driver, the more expensive the policy. That is a trend that holds nationwide. The gap between age groups and the overall price increase for teen drivers varies from state to state, but teenagers are the most expensive age group to insure full stop. The most expensive age to buy car insurance is 18 years old. That is closely followed by 16 years old and then 20 years old. Prices start coming down when drivers turn 25 years old. The cheapest age group to insure are drivers in their 40s.
If you are looking at steep auto insurance costs, it might simply be because of your age. Unfortunately, there is nothing you can do about this except wait to get older and then reevaluate your options. Keeping a clean driving record when you are young also helps keep costs down in the future.
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Location
Car insurance prices vary from state to state, as we have seen. However, insurance rates within a state can vary as well. Drivers in large cities with a lot of cars and a lot of congestion usually pay more than rural drivers who live in small towns with less crowded roads. Cities such as Los Angeles, New York, and Chicago feature much higher costs than rural areas within the same state. Even within the same area, different neighborhoods and individual zip codes can have varying prices. Prices can fluctuate from a few dollars per month to over a hundred dollars per month, depending on a host of local factors.
Vehicle
The type of vehicle and how many miles you drive play a big role in auto insurance costs. Sedans and other so-called commuter cars are generally the cheapest types of cars to insure. Work trucks, sports cars, and high mileage vehicles tend to trend towards the more expensive side. A lot of factors regarding your vehicle play into how much the final insurance bill will be. The make, model, year, odometer, and annual miles logged will all play a role. The color of the vehicle can even make a difference as well, with insurance companies being wary of bright colored cars like yellow and red than they are of neutral-colored cars.
When you are buying a new car, it is important to take this into consideration. It would be a shame to buy a car at the top of your budget only to be stretched to the breaking point by a higher-than-expected insurance bill because the car you purchased falls into a more expensive tier. The difference in insurance costs between a luxury vehicle and a typical compact car can be about 40% for some insurance companies.
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Driving History
Driving history plays a huge role in auto insurance costs. Tickets, accidents, crimes, and other incidents can quickly ramp up your auto insurance costs. Different states have different rules governing what can and cannot be counted against your license and your insurance, but typically any incident that has to be reported will raise your insurance rates.
Sometimes the increases are modest, like a 10% increase for a minor violation, and in some cases, they can be huge. In some at-fault driving states, insurance rates can nearly double after an accident. Look up your local laws and insurance rules before choosing a policy that is right for you. You do not want to run into a situation where you get a 25% increase in premiums because of a speeding ticket. It can happen, and one of the only ways to resolve it is to go to traffic school, which can be a huge hassle.
Credit Score
In some states, your credit score can greatly affect the final price of your car insurance. People with excellent credit typically pay far less than people with bad credit. Having bad credit can increase your car insurance costs by almost double in some states. But this is not always the case.
Some states like California and Michigan have rules that make it so car insurance companies cannot use your credit score to determine a final price for auto insurance coverage. These states aim to protect people with bad credit from paying higher prices, but the result is that everyone usually pays a little more for car insurance than on average.
Conclusion
The United States is a large country with a massive number of cars. The average price per year for full coverage is just under $1,800. The problem is that there are very few average Americans. Car insurance rates are calculated person by person based on over a dozen different factors. The average numbers are a good starting point, but prices vary wildly from state to state, city to city, and person to person.
The best way to know if you are getting a good deal on car insurance is to get a large number of quotes and then ask your friends and family who live nearby what they are paying. That way, you can compare personal quotes, family rates, and the national average to come up with a data point that you feel comfortable working with.
Featured Image Credit: Chompoo Suriyo, Shutterstock
Contents
Writer
Pete Ortiz
Pete has been working in the trades since high school, where he first developed a passion for woodworking. Over the years, he has developed a keen interest in a wide variety of DIY projects around the home. Fascinated by all sort of tools, Pete loves reading and writing about all the latest gadgets and accessories that hit the market. His other interests include astronomy, hiking, and fishing.
As the founder of House Grail, Pete's primary goal is to help consumers make educated decisions about DIY projects at home, in the garage, and in the garden.
