How Much Does Auto Insurance Cost?

When it comes to choosing the right auto insurance plan, one question always comes to mind, and that is the monthly, or the annual premium. Whether you’re considering acquiring auto insurance or changing your existing one either to a different plan or possibly switching from minimum to maximum coverage, and vice versa.  

So, to decide, and determine which auto insurance plan is best suited for you within your budget, it is crucial to understand how much does auto insurance cost.

Just so you know, auto insurance premiums basically vary from person to person based on various factors which includes your location, driving record, insurance coverage, insurance history, age, minimum insurance by state, credit score, vehicle price, and type, gender, marital status, annual mileage, and inflation.

To help you understand how insurance costs significantly vary, this article focuses on all the factors that affect auto insurance premiums by state, the cheapest, and most expensive states for car insurance, effects of inflation on auto insurance, and tips to lower your auto insurance costs.

How Much Does Auto Insurance Cost on Average?

Based on our extensive research, and by referring to various studies conducted by Bankrate, Forbes, and MarketWatch, we’ve thoroughly evaluated the monthly and annual national average cost of auto insurance in the USA.

As of August 2024, the national average auto insurance cost of full coverage ranges from $2,150 to almost $2700 per year. The average cost of minimum auto insurance coverage ranges from $633 to $869 per year.  

The above-mentioned annual auto insurance cost is typically to give you a gross idea of the annual insurance premiums nationwide.

In the USA, there are 38 at-fault states, and 12 no-fault states, so the minimum liability coverage for auto insurance significantly varies between each state. Plus, there are specific legal requirements, and regulations that affect the minimum liability coverage in each state.

On top of that, your insurance premium will significantly vary based on your profession, income, driving records, age, credit history, and many other factors that will be discussed in detail to help you understand, and estimate how much your auto insurance may cost.

How Much Does Auto Insurance Cost by State? 

Depending on where you live, your auto insurance premium can significantly vary. Apart from the minimum state mandated auto insurance coverage, there are other factors that influence auto insurance costs from one state to another.  

Like the total number of automobiles driven on the road. States with more vehicles on the streets are more prone to road accidents. Speaking of car accidents, the cost of auto insurance also varies significantly depending on the number of automobile accidents that occur monthly, or on an annual basis.

This is because states with a higher accident ratio usually have a higher minimum coverage for auto insurance. Plus, insurance companies need to compensate a higher amount depending on your insurance plan, and the coverage limit.  

Not to mention, natural disasters are also crucial in determining the minimum coverage limits. States that are more prone to environmental casualties like storms, hurricanes, and earthquakes have a higher minimum insurance coverage.

Insurance companies in those States also tend to charge a higher price for comprehensive, and full coverage insurance that typically covers vehicle damage due to severe weather.

Plus, states that have a higher crime rate also have a relatively pricier auto insurance premium due to increased risks of auto thefts, and robberies.

Auto Insurance Cost Comparison by State: 

What are the Most Expensive States for Car Insurance in 2024? 

Similarly, we have conducted thorough research to identify the most expensive states for auto insurance in the USA. Based on our findings, New York is the most expensive state for auto insurance, followed by 4 other highly expensive states.

Here are the Top 5 Most Expensive States for Auto Insurance for Full Coverage in the USA: 

New York: $3,697 to $4,769 per year which is 62% higher than the national average.

Louisiana: $3,629 to $3,646 per year which is 59% higher than the national average.

Florida: $3,451 to $4,326 per year which is 51% higher than the national average.

Michigan: $3,010 to $4,067 per year which is 56% higher than the national average.

Colorado: $3,010 to $3,259 per year which is 43% higher than the national average. 

Based on the data presented above, the average cost of auto insurance is significantly higher in Michigan. Many auto insurance companies in the USA tend to charge a high premium in Michigan, if you are looking for a more affordable Insurance Agency in Michigan you can contact us, and we will work around to offer you the most suitable premium. 

What Factors Impact the Cost of Auto Insurance? 

So far, we’ve addressed how the cost of auto insurance varies based on the state you’re residing in. Your location is one of the most important factors when estimating the average cost of auto insurance.

Apart from location there are other crucial factors that significantly affect the cost of auto insurance. Typically, your insurance company will mainly evaluate your profile, and quote a monthly or annual premium based on the insurance plan, and the coverage that you’re interested in.

Now, we will focus on these individual factors to help you estimate and give you an overall idea how much your insurance company might charge you. This will also help you choose the most reliable insurance provider within your budget. 

Driving Record

Driving record is the most crucial factor when it comes to forecasting, and determining how much your insurance company will have to compensate you. More importantly it also reflects how often your insurance company may have to compensate you.

So, depending on your driving record, your insurance company will quote your annual insurance premium.  

Typically, your insurance company would like to see whether you got speeding tickets, got charged/fined for DUI (driving under influence), and how frequently you’ve claimed insurance after an at-fault accident.
Speeding Tickets

Generally, you will have to pay an annual premium of $2,150 to $2,329 for full coverage, but if you get a speeding ticket, your auto insurance cost can jump by $500, or more. This will increase your auto insurance premium to $2,633 to $2,857 per year, which is 23% more of the national average.

DUI (Driving Under Influence)

If you’re charged for driving under influence, then your annual auto insurance coverage can significantly increase. This can increase your annual premium by 95%. So, in this case your insurance company might charge you $3,537 to $4,192 or more per year, instead of the national average of $2,15

After an At-Fault Accident

If you have recently claimed an at-fault auto insurance in the last 3 years, then you will most likely have to pay 40% to 45% more than the national average. Usually, the average rate increases by $850 a year in such cases, so you would have to pay an annual premium of $3,005 to $3,378 or more, compared to the national average of $2,150.There are some exceptions though, for example in New York insurance companies cannot charge an additional rate if the accidental damage is less than $2,000, and no bodily injurie

Insurance Coverage

Your auto insurance cost will vary depending on the insurance plan, and the coverage that you choose to purchase. In general, if you go for the minimum coverage then you will have to pay a monthly premium of $43 to $70, or an annual premium of $507 to $1,060 or more.

If you go for full coverage insurance, then you will have to pay a monthly premium of $151 to $289, or an annual premium of $1,811 to $3,463 or more depending on the exact quote of your insurance provider. The data that’s mentioned here is from a thorough market analysis, so it can be auto insurance cost can be anything within this range, or beyond.

Insurance History

The insurance provider will investigate your insurance history mainly to identify how frequently you’ve claimed auto insurance, and how much you were compensated for vehicle damage, and bodily injuries. 

The total amount that has been compensated by your current or previous auto insurance provider will be a strong determinant of evaluating the insurance premium that you will have to pay annually.

As it was previously mentioned in this article, if you have recently claimed an auto insurance in the last 3 years then you may be charged a higher premium of 40% to 45% or more of the national or state average.

If you’re a loyal, and recurring customer of an auto insurance company, they might offer you accident forgiveness benefit, and on note that, your insurance premium won’t increase.

But then again, if you get involved in another at-fault accident right after, or if you claim another auto insurance any time soon then you may end up losing that benefit.

Age

Regardless of whichever state that you’re residing in, one thing’s common throughout the entire country when it comes to determining auto insurance cost based on age. In the USA, teenagers have a bad record of getting into more frequent accidents and claiming more frequent auto insurance.

So, that’s why the annual premium for teenage drivers, particularly between the ages of 16 to 20 is significantly a lot higher. On average, adults between the ages of 25 to 60 are charged what we consider the normal rate.  

Again, we’re only focusing on the age factor here, given the benefit of the doubt that adult drivers have a clean driving record. If they have a poor driving record, and insurance history then data presented below based on the age factor won’t necessarily apply to them.

Senior drivers from the age of 70, and beyond are generally charged with a higher annual premium. Although they’re more experienced, they usually have a slower response rate which can lead to more frequent accidents.  

The following data represents the average auto insurance cost based on age:  

Credit Score 

In most US States, credit scores are a crucial metric of determining auto insurance costs, except for 8 States that don’t allow insurance companies to quote an insurance premium based on credit score, and credit history.  

These 8 states include California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah. 

If you’re residing in any of the other 42 States that do allow insurance companies to check your credit score, then it is vital for you to maintain a good credit score.

The reason credit scores are so important is, it reflects how quickly and sincerely you pay your credit bills. It mainly illustrates the full amount of credit debt that you’ve paid in due time.

So, having a good credit score automatically gives the impression that you will also pay your auto insurance premium in due time. 

Drivers with a poor credit score happen to pay 76% to 87% more auto insurance premiums than drivers with a good credit score.

That’s an average increase of at least $1600 a year, which means if you had to pay an annual premium of $2,150 a year with a good credit score, then you may have to pay $3,779 or more for having a poor credit score. 

Vehicle Price, and Type 

Depending on the type of vehicle that you drive, your auto insurance will significantly vary based on it. If you’re driving a sport, or luxury car then you’re more prone to getting into an accident.

Especially because you’re more likely to drive at much higher speed, and on top of that the cost of parts, and its overall maintenance cost is relatively much more expensive than average sedans.

Not to mention, sports car accidents are usually much more severe, especially when you’ve a car accident at a very high speed, you, and the other driver are likely to sustain more critical bodily injuries. So that adds a high risk of increased medical bills.

On the other hand, if you’re driving a minivan or any heavy vehicle of that sort, you may be safer from severe bodily injuries, but you may damage the other vehicle more.

Of course, if you’re driving cheaper vehicles like sedans then your auto insurance is likely to be cheaper. So, when it comes to auto insurance cost, your vehicle type, and its price has a huge impact on the insurance premium.

The following data below shows the Auto Insurance Rate by Car Types: 

The cost of repairing an EV (electric vehicle) is relatively more expensive than gas, or hybrid. Based on the fuel type of your vehicle the annual insurance premium will also vary as follows,