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byFabio Faschi, PLCS, SBCS, CLCS
Fabio Faschi, PLCS, SBCS, CLCS
Property & Casualty Insurance Expert
Updated January 7, 2022|4 min read
Table of Contents
The average cost of auto insurance in the U.S. is around $1,652 per year (or about $137 per month), based on rates for 30-45-year-old drivers, according to a 2021 analysis of car insurance rates by Policygenius.
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But car insurance rates are different for every driver, which makes it hard to predict what you’ll pay for coverage. Your rates will be personal, since they’re based on things like your ZIP code, driving record, age, marital status, credit score, vehicle, insurance history and how high or low you set your coverage limits.
The most expensive state for car insurance is Florida, where the average annual cost of car insurance is $2,914
The least expensive is North Carolina, with an average annual premium of $1,009
Small sedans are the most expensive cars to insure, with an annual cost of $1,342, while small SUVs cost the least to insure, averaging at $1,087 a year
Car insurance rates vary widely by state (along with your age and your driving history, your ZIP code is one of the most important factors in determining how much you’ll pay).
There are a few reasons why location matters so much when it comes to car insurance rates — if your area is densely populated, crime rates are high, or natural disasters are frequent, that means more claims, which means higher rates.
So where does car insurance cost the most—and least? Below is a breakdown of the average annual cost of auto insurance by state, according to our analysis.
|State||Average annual cost|
|District of Columbia||$1,796|
Florida, Louisiana, Michigan, New Jersey, and New York are the states with the most expensive average car insurance rates.
Just because you live in one of the most expensive states for auto insurance doesn’t mean you’ll automatically have to pay super high rates — comparing quotes from multiple insurance companies through Policygenius can help you choose the coverage that’s best for your budget.
North Carolina, Ohio, Wisconsin, Idaho, and Vermont are the states with the cheapest average car insurance rates, according to our analysis.
The cheapest states for car insurance typically have lower minimum coverage requirements, meaning you can save by opting out of certain types of coverage. Idaho, for instance, doesn’t mandate personal injury protection (PIP), which is required in no-fault states and covers your injuries after an accident, or uninsured/underinsured motorist coverage, which covers damage caused by a driver without insurance.
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|Type of coverage||Average annual cost nationwide|
The specific kinds of car insurance coverage that make up your policy will also help determine the price of your monthly premiums. A so-called full coverage auto insurance policy includes comprehensive and collision coverage in addition to liability.
Liability coverage, which is the backbone of a policy, covers the costs if you injure someone or damage their property with your car, while collision coverage covers damage to your own car after an accident, even if you caused it, and comprehensive coverage covers damage not from car accidents, like if a heavy tree branch falls on your car.
|Age||Gender||Average annual cost|
Along with your location and your driving history, age is one of the most important factors when it comes to your car insurance rates. Younger, less experienced drivers pay more because they’re more likely to have an accident and file a claim.
Your gender can also have an effect on your rates, although some states don’t allow car insurance companies to use gender as a factor when calculating how much to charge for coverage.
|Type of car||Annual cost of car insurance|
AAA’s 2020 Your Driving Costs  study examined the ownership costs associated with different types of vehicles. The study found that the cheapest car to insure was a small SUV, at an annual cost of $1,087, and the most expensive vehicle to insure was a small sedan, with an annual cost of $1,342.
|Violation||Average annual cost|
|Hit and run||$3,182|
|Driving with a suspended license||$3,117|
|Driving with an open container||$2,485|
|Failure to stop at a red light||$2,122|
|Driving with expired registration||$2,068|
Your driving history is another major factor in determining your auto insurance rates — more accidents or violations on your record means you’ll pay more for coverage. But not every ding on your driving record will cost the same, more serious violations typically lead to higher rate increases.
|Credit score||Average annual cost|
A lower credit score often means higher rates, and vice versa. But in some states, car insurance companies aren’t allowed to use your credit score to calculate your rates, so if you live in California, Hawaii, Maryland, Massachusetts, Michigan, Oregon or Utah, your credit score won’t matter when it comes to car insurance.
There are even more factors that can affect your car insurance rates besides location, coverage levels, age, gender, car type, driving history, and credit score. The cost of car insurance can also be influenced by:
The company you choose: Even if you live in a state where rates are higher than average, some companies offer more competitive rates than others, which is why it’s important to shop around.
Discounts: Some of the most common car insurance discounts include savings for bundling policies, completing a driving safety course, and paying your annual policy in full.
Insurance history: You may pay more for car insurance if you've had past coverage with a high-risk provider or if you have a lapse in coverage on your record. If you have a history of consistent coverage and on-time payments, on the other hand, you could see lower rates.
Your annual mileage: If you use your car often, your auto insurance will cost more than for someone who drives infrequently.
Your job and education: In some states it's illegal for insurers to use your occupation and education to set rates. However, in many places you could pay more for car insurance if you're unemployed or if you didn't graduate from college.
From the moment you start shopping around for auto insurance, there are a number of ways you can save. Even if you already have an existing car insurance policy, there are still some steps you can take to lower your premiums.
Bundle your home and auto insurance: Combining multiple policies (like your home and auto insurance) with the same company can earn you serious savings
Take advantage of car insurance discounts: Check with an agent to make sure you’re getting every discount you can, including discounts for having certain safety features in your car, or for taking a defensive driving course
Change your coverage limits: Not every driver needs the highest level of every coverage. We recommend liability levels of $100,000 per person, $300,000 per accident in bodily injury liability and $100,000 per accident in property damage liability, typically written as 100/300/100 on your insurance policy
Raise your deductible amount: A higher comprehensive or collision deductible (meaning the amount you have to pay out of pocket per claim) means lower premiums — just remember you may actually have to pay that amount when you file a claim
Shop around once a year: Even if you’re happy with your coverage, reshopping your car insurance annually with Policygenius can help you save big and make sure you’re not paying too much for coverage
Policygenius has found that the average cost of car insurance is $137 per month for a full-coverage policy. A minimum coverage policy is much cheaper at $52 per month, but this type of policy could leave drivers unprotected and force them to pay out of pocket for uncovered losses.
Drivers with cheaper cars typically pay less for coverage. You should still have relatively high liability limits, even if your car is a clunker, because you could easily cause thousands of dollars worth of damage in an accident. But if your car is worth less than a typical comprehensive or collision deductible and you would be fine paying out of pocket to replace it if it were stolen, you can limit your coverage to liability-only, and save by not paying for comp and collision.
Car insurance rates are often based on your age, but sometimes they’re actually based on your years of driving experience. That means that a newly licensed 40-year-old would pay as much as a newly-licensed-16-year-old (which is a lot). The good news is that inexperienced drivers will see their rates drop over time, as long as they maintain a clean driving record.
Every member of your household should be listed on your auto insurance policy unless they’re specifically excluded from your coverage. That means that if you and your spouse share ownership of the same car, you both need to be listed on the policy — otherwise you risk not being covered in an accident.
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