How Much Does Car Insurance Cost?

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

And a typical full coverage is $1,325 according to another study. So, you see that changing levels of protection can make a huge difference. Imagine the possible savings when you take so many things that go into premium calculations into account. Age, driving history, claims record, gender and credit score are the key factors. The type of car can be hugely influential too. You can certainly get the best prices when you own one of those cheapest automobiles to insure. Location is another highly influential factor that will be looked at closely below.

Vehicle Insurance Prices in Each State

The price of a representative policy can vary depending on the zip code. It 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 per vehicle in each state, according to the latest reports from 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 same for full coverage, according to a 2016 study. This study averaged quotes from six largest auto insurance companies for the same person driving 20 of the best-selling cars in 10 ZIP codes per state. They are based on 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 record and good credit. Obviously rates will depend on particulars, needs and requirements.

Differences between the Two Reports (First & Second Columns) 

The report by NAIC (displayed on the first column) starts by looking at total premium expenditure in each state and finds the mean by dividing it with the number of vehicles. It isn’t clear if the policies purchased are liability only or much loaded packages. However, it is real expenditure figures.

The study (displayed on the second column) shows us the typical cost for a much better coverage offered to a good driver. Again, they put all the figures together and find the median for us. This study allows us to compare quotes across the states because the driver and other details used for estimating are the same.

Table: Average Expenditure & Full Coverage Auto Insurance Costs Across the U.S.

State Avg. spent on
car insurance (rank)
Avg. 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

The difference between the most expensive New Jersey with $1,254 and cheapest Idaho with $553 is $700. This clearly shows that it largely depends on where you live. It is probably no surprise to see the worst rates in New Jersey, the most densely populated in the US, where there are many more traffic accidents. Also, litigious nature of New Jersey residents combined with high Personal Injury Protection coverage and frauds contribute to the overall prices.

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

Types of policies purchased influences the overall numbers. In turn, coverage purchased is influenced by the economy. If you live in an affluent area, people would have enough money to buy the latest models and require decent protection for them. This will result in higher average cost of automobile insurance. The opposite is true for poorer states where people spend less for most things.

Furthermore, fairly urbanized states with crowded cities, dense traffic and larger per capita income would have higher premiums. The latest NAIC report shows that urban areas with better earnings and denser traffic tend to pay more. Local rules like tort liability, minimum limits required, auto theft numbers and repair charges also affect.

Changes in Full Coverage Costs between 2015 and 2016

– Compared to 2015 there are 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 a typical full coverage price dropped over $300 within a year and they dropped 10 places in the most expensive ranking.

– New Jersey went completely the opposite with about a $300 increase and moved from 10 to 5  to take place within the top 5 most.

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

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

Your Coverage and Costs

So far, we have been looking at what people typically pay and discussing how it can help you. Now it is time to find low rates for you especially if you are paying too much. 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 Coverage?

One of the first things you need to check is to see if you have the right security. If you are too concerned about the costs you may end up with a policy that will not meet possible future claims you make or made against you. The point is to make sure that you don’t end up with a lousy deal after paying hundreds of dollars, especially if you can buy what you need for only another couple of hundred dollars.

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

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

  2. Why Do You Pay More than Most Motorists?

Have you ever asked why my premium is so high? There could be several reasons as to why you are paying more than most people in your area. 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 the area and rate increase by the current provider.

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 ride especially after your son/daughter starts driving. You may not have noticed that it is a bit expensive compared to usual premiums because of a high-risk automobile. This would now be much worse with a teenager on the policy that it may be time to switch to a cheap to insure car. You can also deal with a company who just bumped up 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 everywhere. 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 not you can start looking for ways to find an affordable policy 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 Insurance?

One of the reasons why you may be paying more is because you are driving a high risk automobile. A common misconception is that only expensive sports cars can increase rates. That is not really true because the latest models 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 ride and yet pay less.

  5. How Many Quotations Do You Get?

If you are one of those auto-renewing happy go policyholders you probably haven’t compared renewal quotes 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 in the market.

Always make a habit of comparing prices at least once a year but ideally at each renewal. If you regularly check for better quotes, you would know which companies offer the cheapest rates. Also, remember that each company changes them often and it may be adjusted because of the changes in life like getting older or getting a traffic ticket. That is why you should keep checking, especially after a major change like switching cars, moving home, changing jobs, reaching your 25th birthday.