How Much Does Car Insurance Cost?

A question like how much does car insurance cost can only be answered in terms of averages because every vehicle is insured differently and driven in a diverse location by unique set of drivers. Knowing how much is an average premium can give you clues as to what you should roughly be expecting to pay even though your rates can be a lot less or more depending on many things like your risk profile, automobile, age, gender and zip code. According to the latest NAIC report, average cost of car insurance is $841 in the US.

And average cost for full coverage auto insurance is $1,325 according to another study. So, you see that only changing coverage can make a huge difference even in averages. Imagine how much your rates can be different when you take so many things that goes into premium calculations into account. Your age, driving history, claims record, gender and credit score are the key factors. The type of car you drive can be hugely influential too. You can certainly get the best rates when you own one of those cheapest cars to insure. Your location is another highly influential factor that will be looked at closely below.

How Much Is Car Insurance? – State by State

What is the premium for a typical auto policy in your state? How much average auto insurance costs can vary depending on which state you live in is clearly demonstrated by two different reports that are laid out in the table below.

The first column on the table is the average expenditure (average cost of car insurance) per vehicle in each state, according to the latest reports from National Association of Insurance Commissioners (NAIC) and based on 2013 data. These figures are the result of dividing the total amount of premiums collected by the total number of insured vehicles.

The second column shows the average cost of full coverage auto insurance, according to 2016 study. This study averaged premium quotes from six largest auto insurance companies for the same driver driving 20 of the best-selling cars in 10 ZIP codes per state. Premiums are based on full coverage for a single, 40-year-old male who commutes 12 miles a day, with policy limits of 100/300/50 and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean driving record and good credit. Obviously your rates will depend on your particulars and coverage requirements.

Differences between the Two Reports (First & Second Columns) 

The report by NAIC (displayed on first column) starts by looking into how much is total auto insurance expenditure in each state and what would the average cost of automobile insurance be when it is divided by number of insured vehicles. It doesn’t break policies purchased into liability only or full coverage or doesn’t tell us what types of policies were bought. However, it is real expenditure figures.

The study (displayed on second column) tells us how much is average car insurance for full coverage by checking how much is full coverage car insurance for a particular type of driver for the same coverage from different insurers. Again, they put all the figures together and find the average for us. This study allows us to compare auto insurance costs across the states because the driver and coverage type used for estimating average cost are the same.

Table: State by State Average Expenditure & Average Full Coverage Car Insurance Cost

State Average spent on
car insurance (rank)
Average cost for
full coverage (rank)
Alabama $673 (38) $1,337 (20)
Alaska $889 (14) $1,078 (37)
Arizona $811 (18) $1,188 (31)
Arkansas $703 (36) $1,345 (19)
California $783 (22) $1,752 (7)
Colorado $778 (23) $1,393 (16)
Connecticut $1,011 (9) $1,367 (17)
Delaware $1,101 (7) $1,607 (11)
District of Columbia $1,187 (2) $1,773 (6)
Florida $1,144 (5) $1,654 (8)
Georgia $801 (19) $1,559 (12)
Hawaii $739 (29) $1,049 (41)
Idaho $553 (51) $935 (48)
Illinois $745 (27) $1,035 (42)
Indiana $622 (45) $1,113 (36)
Iowa $572 (50) $989 (44)
Kansas $669 (39) $1,135 (35)
Kentucky $773 (24) $1,295 (23)
Louisiana $1,146 (4) $1,842 (4)
Maine $593 (48) $808 (51)
Maryland $979 (11) $1,610 (9)
Massachusetts $1,008 (10) $1,325 (21)
Michigan $1,131 (6) $2,738 (1)
Minnesota $745 (28) $1,257 (27)
Mississippi $768 (26) $1,277 (25)
Missouri $704 (34) $1,056 (39)
Montana $679 (37) $2,297 (2)
Nebraska $639 (43) $1,188 (30)
Nevada $936 (12) $1,221 (28)
New Hampshire $733 (31) $941 (47)
New Jersey $1,254 (1) $1,905 (3)
New Mexico $723 (32) $1,277 (24)
New York $1,182 (3) $1,050 (40)
North Carolina $625 (44) $987 (45)
North Dakota $605 (47) $1,200 (29)
Ohio $659 (40) $900 (50)
Oklahoma $768 (25) $1,778 (5)
Oregon $783 (21) $1,267 (26)
Pennsylvania $841 (16) $1,305 (22)
Rhode Island $1,066 (8) $1,608 (10)
South Carolina $794 (20) $1,353 (18)
South Dakota $581 (49) $1,168 (32)
Tennessee $704 (35) $1,145 (34)
Texas $895 (13) $1,510 (13)
Utah $734 (30) $1,061 (38)
Vermont $656 (41) $942 (46)
Virginia $719 (33) $1,020 (43)
Washington $838 (17) $1,168 (33)
West Virginia $859 (15) $1,456 (14)
Wisconsin $621 (46) $912 (49)
Wyoming $640 (42) $1,421 (15)
National average $841 $1,325

How Much Does Auto Insurance Cost in your State?

Average cost of car insurance is $700 different between the most expensive state of New Jersey with $1,254 and cheapest state of Idaho with $553. This clearly shows that “how much is car insurance” largely depends on where you live. It is probably no surprise to see high rates in New Jersey, the most densely populated state in the US where traffic accident rates are high. Also, litigious nature of New Jersey residents combined with high Personal Injury Protection coverage and frauds contribute to the overall high premiums.

On the other hand, Idaho, one of the least populated states with only 1.6 million residents is probably exact opposite of New Jersey. Idaho benefits from large countryside and a competitive insurance market. Plus, lack of major cities keeps traffic accidents down. That is why Idaho is the cheapest state for car insurance.

Types of policies purchased in each state affect average cost of vehicle insurance. In turn, coverage purchased is influenced by your state’s economy. If you live in an affluent state, people would have enough money to buy new automobiles and require full coverage car insurance. This will result in higher average cost of auto insurance in your state. The opposite is true for poorer states where people spend less for most things including premiums.

Furthermore, highly urbanized states with crowded cities, dense traffic and higher per capita income would have higher average costs. the latest NAIC report shows that high premium states tend to be highly urban, with better earnings and higher traffic density. State insurance rules like tort liability, minimum coverage requirements, auto theft rates and repair costs also affect premiums.

Changes in Full Coverage Costs between 2015 and 2016

– Compared to 2015 there some increases and decreases in the premiums and in the national positions. Some of the notable cost improvements are seen in Connecticut and Mississippi where average full coverage car insurance dropped over $300 within a year and the states dropped 10 places in the most expensive states for auto insurance ranking.

– New Jersey went completely the opposite with about $300 increase on average full coverage auto insurance costs and moved from 10 to 5  to take place within the top 5 most expensive states.

– Hardly any change in Kansas, North Carolina, Pennsylvania, Utah, Vermont, Virginia and Wisconsin.

– No change in Maine as it is confirmed once more as the state with the cheapest car insurance rates in the USA, almost $100 cheaper on average than the next state Ohio. So, the top five states with the cheapest auto insurance are 1. Maine, 2. Ohio, 3, Wisconsin, 4. Idaho and 5. New Hampshire.

How Much Is Auto Insurance for You?

So far, we have been looking at average cost of auto insurance and discussing how it can help you. Now it is time to find cheap car insurance for you especially if you are paying much more than the average for your state. There are a few areas to check and make sure you are not making mistakes that cost you money when buying a policy. Sometimes, you don’t see even the most obvious mistakes you are making until someone points them out to you. So, let’s have a look at a few points and check to see how you are doing.

  1. Do You Have the Right Vehicle Insurance Coverage?

One of the first things you need to check is to see if you have the right automobile insurance coverage for your needs. So, the first question to ask is; how much car insurance do I need? If you are too concerned about the costs you may end up with a policy that will not cover possible future claims you make or made against you. The point is to make sure that you don’t end up with a lousy coverage after paying hundreds of dollars, especially if you can buy the coverage you need for only another couple of hundred dollars.

Let’s look into how is car insurance premium calculated? Many policyholders don’t realize that basic policies are not usually best value for money and you start getting much more for your money when you pass the minimum threshold. An insurer must charge certain amount of money for the policy to cover administration and marketing costs and be profitable. Usually basic liabilities only policies cover this threshold. That is why you shouldn’t be scared looking into increasing your liability coverage and adding collision, comprehensive and uninsured motorist coverage on top if you own a decent enough automobile.

But you may not need to push for rental reimbursement coverage if you have access to another vehicle. You may not need to worry about Personal Injury Protection if you have good health insurance coverage for you and your family. These are the areas to save money. Also, you may want to increase the deductible if it means you will save money on auto insurance.

  2. Why Do You Pay more than Average Car Insurance Costs?

Have you ever asked why is my car insurance so high? There could be several reasons as to why you are paying more than the average premium in your state. You need to figure out what that might be. Usual suspects are traffic tickets, recent claims, young drivers added to policy, deteriorating credit score, increase in crime and accidents in your area and rate increase by your current insurer.

You can deal with some of these issues pretty quickly and some of them may take time to fix. For example, it may be time to change your car especially after your son/daughter starts driving. You may not have noticed that you are paying higher than usual premiums because of your high-risk automobile. This would now be much worse with a teenager on your policy that it may be time to switch to a cheap to insure car. You can also deal with an insurer who just bumped up your rates by switching to a cheaper one.

  3. Are You Missing out on Valuable Discounts?

People make the mistake of thinking that you either qualify for discounts or not and it is the same for every insurer. It certainly isn’t the case since every company offers different deals, discounts and special savings and the size of discounts vary tremendously.

That is why you need to have a quick look at your policyholder profile to see if you are actually a good driver who deserves much better rates. If so, you should push for them. If you think you are a high-risk driver you can start looking for ways to find affordable car insurance for high risk drivers. The former requires you to be proactive to find the best deals and the latter requires you to work harder to avoid surcharges.

  4. Is Your Car Pushing Up your Insurance?

One of the reasons why you may be paying more than average auto insurance cost in your state may be because you are driving a high risk automobile. A common misconception is that only expensive sports cars can increase your rates. That is not really true because new cars with latest safety and security features are great in reducing accidents, injuries and vehicle theft. That is why insuring a new car may be cheaper, particularly when you have an older model that is not really built with safety and security in mind. How great it would be to drive a new automobile and yet pay less insurance.

  5. How Many Auto Insurance Quotes Do You Get?

If you are one of those auto-renewing happy go policyholders you probably haven’t compared your renewal quote with alternatives for years. Fixing only this problem by getting several quotes and comparing them could save you as much as 50%. Believe it or not, there are huge price differences between vehicle insurers.

Always make a habit of comparing auto insurance prices at least once a year but ideally at each renewal. If you regularly check for better quotes, “how much does vehicle insurance cost” will quickly be replaced in your mind by “which companies offer the cheapest car insurance“. Also, remember that each company changes their rates often and the rates applied to you may be adjusted because of the changes in your life like getting older or getting a traffic ticket. That is why you should keep checking especially after a major change in your life like switching cars, moving home, changing job, reaching to your 25th birthday.

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