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What is the National Average Cost for Car Insurance?

According to our 2024 cost database, the national average for state minimum liability is $52 a month or $632 a year. The average cost for full coverage policies across all 50 states is $166 a month or $2,000 a year.

Find the Cheapest Car Insurance Rates by State

Auto insurance rates and laws can vary widely from state to state, which is why it’s smart to always get multiple free car insurance quotes. Learn more about the required minimums, tips for moving and how to save money on auto insurance in your state by finding your state in the list below. As you do your research by comparing auto insurance rates, you’ll find that each state has their own set of rules which can lead to added costs to your overall auto insurance coverage price rates.

Which States Have the Most Expensive Car Insurance Costs on Average?

1. Michigan: Michigan often has the highest car insurance rates in the country. This is partly due to its unique no-fault insurance system and high healthcare costs.
   • State Minimum: $114 monthly – $1,368 yearly
   • Full Coverage: $303 monthly – $3,637 yearly
2. Louisiana: Louisiana consistently ranks among the states with the highest car insurance rates. Factors contributing to this include high rates of accidents, uninsured drivers, and litigation.
   • State Minimum: $76 monthly – $915 yearly
   • Full Coverage: $253 monthly – $3,034 yearly
3. Florida: Florida also tends to have high car insurance rates, driven by factors such as high population density, frequent severe weather events, and a large number of uninsured drivers.
   • State Minimum: $115 monthly – $1,384yearly
   • Full Coverage: $270 monthly – $3,238 yearly
4. New York: New York’s rates are often higher than the national average, especially in urban areas like New York City, due to high population density and a relatively high number of accidents.
   • State Minimum: $73 monthly – $872 yearly
   • Full Coverage: $174 monthly – $2,082 yearly
5. California: While California’s rates can vary depending on the area, it generally has higher-than-average rates due to factors such as high population density, heavy traffic, and a significant number of uninsured drivers.
   • State Minimum: $50 monthly – $601 yearly
   • Full Coverage: $192 monthly – $2,307 yearly
6. Texas: Texas has rates that are slightly above the national average. Factors contributing to this include a large population, high rates of accidents, and weather-related risks.
   • State Minimum: $58 monthly – $690 yearly
   • Full Coverage: $183 monthly – $2,199 yearly
7. New Jersey: New Jersey typically has high car insurance rates due to its densely populated urban areas, high cost of living and other factors.
   • State Minimum: $110 monthly – $1,325 yearly
   • Full Coverage: $209 monthly – $2,507 yearly
8. Nevada: Nevada often has higher-than-average rates due to factors like high numbers of tourists, urban traffic, and occasional severe weather events.
   • State Minimum: $103 monthly – $1,232 yearly
   • Full Coverage: $232 monthly – $2,782 yearly

Car insurance rates can vary significantly based on individual factors such as driving history, age, gender, type of vehicle, coverage limits and the insurance company. It’s always best to use InsuranceQuotes to shop around and compare quotes from multiple insurers to find the best rates for your specific situation. Additionally, insurance rates can change over time due to various factors, so it’s essential to stay updated and check your auto policy options every 4 months to get the best price.

Which States Have the Cheapest Average Car Insurance Costs?

The cost of car insurance changes drastically depending on the state that you live in. If you happen to live in the following states, the average cost of your auto rates will be much lower than the national average. Here are a list of the cheapest car insurance costs for state minimum liability and full coverage policies:

1. Maine: ME often ranks among the states with the lowest average car insurance premiums. This may be due to factors such as its rural nature and relatively low population density.
   • State Minimum: $31 monthly – $374 yearly
   • Full Coverage: $103 monthly – $1,232 yearly
2. Idaho: ID is often cited as having lower-than-average insurance premiums, although rates can vary depending on factors such as location and driving record.
   • State Minimum: $31 monthly – $374 yearly
   • Full Coverage: $116 monthly – $1,396 yearly
3. Vermont: VT is a rural state with lower population density, which can contribute to lower insurance costs.
   • State Minimum: $26 monthly – $315 yearly
   • Full Coverage: $99 monthly – $1,193 yearly
4. Ohio: OH typically has lower-than-average insurance premiums compared to many other states. Factors such as its lower population density and fewer severe weather events can contribute to this.
   • State Minimum: $45 monthly – $540 yearly
   • Full Coverage: $133 monthly – $1,593 yearly
5. Wisconsin: WI is known for having relatively affordable car insurance rates compared to many other states.
   • State Minimum: $34 monthly – $402 yearly
   • Full Coverage: $141 monthly – $1,688 yearly
6. North Carolina: NC has a state-run insurance system (North Carolina Rate Bureau) which helps regulate insurance rates, contributing to relatively lower premiums compared to some other states.
   • State Minimum: $39 monthly – $472 yearly
   • Full Coverage: $135 monthly – $1,621 yearly
7. Indiana: IN is known for having affordable car insurance costs compared to the national average.
   • State Minimum: $36 monthly – $435 yearly
   • Full Coverage: $132 monthly – $1,581 yearly
8. Iowa: IA is another state with relatively low population density, which can contribute to lower insurance costs.
   • State Minimum: $23 monthly – $278 yearly
   • Full Coverage: $130 monthly – $1,557 yearly
9. Hawaii: HI has multiple car insurance companies who offer state discounts which leads to lower prices overall.
   • State Minimum: $44 monthly – $530 yearly
   • Full Coverage: $138 monthly – $1,650 yearly
10. Tennessee: TN offers many low cost auto coverage options.
    • State Minimum: $34 monthly – $408 yearly
    • Full Coverage: $127 monthly – $1,518 yearly

What is the Difference Between State Minimum Liability & Full Coverage Car Insurance?

Minimum liability and full coverage car insurance policies offer different levels of protection for drivers in their state, each with its own advantages and considerations. Here’s a breakdown of the major differences between each policy option:

1. Minimum Liability Coverage:
   • This is the minimum level of insurance required by law in most states.
   • It typically includes two types of coverage: bodily injury liability and property damage liability.
   • Bodily injury liability covers medical expenses, lost wages, and legal fees for injuries caused to other people in an accident where you’re at fault.
   • Property damage liability covers damage to another person’s property, such as their vehicle or home.
   • Minimum liability coverage limits vary by state but usually appear in a format like “25/50/25”, where:
     • $25,000 bodily injury liability per person
     • $50,000 bodily injury liability per accident
     • $25,000 property damage liability per accident
   • While it meets legal requirements, it may not provide sufficient coverage in accidents involving extensive damage or injuries.
2. Full Coverage Car Insurance:
   • This is a more comprehensive insurance option that includes not only liability coverage but also additional protections for your own vehicle.
   • In addition to liability coverage, full coverage typically includes collision and comprehensive coverage.
   • Collision coverage pays for damage to your vehicle caused by a collision with another vehicle or object.
   • Comprehensive coverage pays for damage to your vehicle from incidents other than collisions, such as theft, vandalism, or natural disasters.
   • Full coverage policies usually have higher premiums compared to minimum liability coverage due to the broader range of protections.
   • Full coverage may be required if you have a loan or lease on your vehicle, as lenders often require you to protect their investment with comprehensive and collision coverage.

Considerations:

• Cost: Minimum liability coverage is generally cheaper than full coverage. However, the cost of insurance depends on various factors, including your driving history, the value of your car, and where you live.
• Risk Tolerance: Choosing between minimum liability and full coverage often depends on your risk tolerance. If you’re willing to accept more risk to save money on premiums, minimum liability coverage may suffice. If you want more comprehensive protection for your vehicle and assets, full coverage may be preferable.
• Vehicle Value: The value of your vehicle is an important factor in deciding whether to opt for full coverage. If your car is older or has a low market value, you might opt for minimum coverage to save on premiums. Conversely, if you have a newer or more valuable vehicle, you may want the extra protection of full coverage.
• Legal Requirements: Ensure you meet your state’s minimum insurance requirements to avoid penalties or legal issues.

Ultimately, the choice between minimum liability and full coverage car insurance depends on your individual circumstances, budget, and preferences for risk management. It’s essential to carefully evaluate your options and choose the coverage that best suits your needs.

Why Do Auto Policy Costs Differ by State?

Car insurance rates can vary significantly by state due to a variety of factors such as population density, traffic congestion, weather patterns, crime rates, and state insurance regulations. Here’s a general overview of why car insurance rates differ across states:

1. State regulations: Each state has its own set of insurance regulations, including requirements for minimum coverage levels, permissible rating factors, and approval processes for rate changes. These regulations can influence the pricing strategies of insurance companies operating within the state.
2. Population Density: States with higher population densities tend to have more traffic congestion and a higher likelihood of accidents, leading to higher insurance rates. Examples include California, New York, and New Jersey.
3. Weather Patterns: States prone to severe weather events such as hurricanes, tornadoes, or heavy snowfall may have higher insurance rates due to increased risk of vehicle damage. This includes states like Florida, Texas, and Colorado.
4. Crime Rates: Areas with higher crime rates, especially auto theft and vandalism, often have higher insurance premiums. Urban areas or states with higher crime rates like Michigan, Louisiana, and Illinois may have higher insurance costs.
5. State Insurance Regulations: Each state has its own insurance regulations and requirements, which can affect insurance rates. Some states have no-fault insurance laws, which may impact premiums. States with more stringent insurance regulations may have higher premiums.
6. Medical Costs: States with higher medical costs typically have higher insurance rates due to the increased expenses associated with medical claims resulting from accidents. This includes states like Massachusetts and Connecticut.
7. Uninsured Motorist Rates: The percentage of uninsured motorists in a state can also affect insurance rates. States with higher rates of uninsured drivers usually have higher risks that insurance companies take into account.
8. Traffic congestion and accident rates: States with higher levels of traffic congestion and more frequent accidents typically have higher insurance premiums. This is because the likelihood of accidents and subsequent insurance claims is higher in areas with heavy traffic.
9. Legal environment: Differences in tort liability systems between states can influence insurance costs. States with “no-fault” insurance systems tend to have higher insurance premiums because insurance companies must cover the costs of medical expenses regardless of fault, leading to increased claims costs.

What Factors Affect Your Car Insurance Rates?

Car insurance rates in your state can be influenced by several factors, including:

1. Driving record: A clean driving record typically leads to lower premiums, while accidents, tickets, and DUI convictions can increase rates.
2. Age and gender: Younger drivers, especially teenagers, tend to have higher rates due to their lack of driving experience. Additionally, statistics show that males are more likely to be involved in accidents than females, so gender can also affect rates.
3. Location: Where you live can impact your insurance rates. Urban areas with higher traffic congestion and crime rates may have higher premiums compared to rural areas.
4. Vehicle type: The make, model, and year of your vehicle can affect your insurance rates. Cars with high repair costs, high theft rates, or those that are more expensive to replace or repair generally have higher premiums.
5. Driving Habits: How you use your car (e.g., for commuting, business, pleasure) and the number of miles you drive annually can affect your rates.
6. Credit score: In many states, insurance companies use credit scores as a factor in determining rates. Individuals with lower credit scores may face higher premiums.
7. Coverage limits and deductible: Higher coverage limits and lower deductibles typically result in higher premiums, while lower coverage limits and higher deductibles can lower premiums.
8. Marital status: Married individuals tend to have lower rates compared to single individuals, as statistics suggest they are less likely to engage in risky driving behaviors.
9. Previous insurance history: Continuous coverage and a history of making on-time payments may lead to discounts.
10. Discounts: Insurance companies often offer discounts for factors such as bundling policies, having safety features in your car, completing driver education courses, or being a member of certain organizations.
11. Claims history: Individuals with a history of making frequent claims may face higher premiums.
12. Occupation: Some occupations are associated with lower risk, leading to lower premiums. For example, individuals with jobs that require a lot of driving may have higher rates.