Between 2022 and 2023, car insurance rates increased by almost 14%, with the national average for comprehensive car insurance from $11,771 to $2014.
Despite this big increase, rates are expected to continue rising through 2023, even though the average American already pays almost 3% of their income on auto insurance alone. However, since auto insurance rates vary from state to state, how much you end up paying depends on where you live, for better or worse.
How much your car insurance costs is based on a number of factors, such as your driving record, credit score and the model of the insured vehicle. Also, where you live has a big impact on your insurance rates. Car insurance rates vary between states and are based on a number of factors, such as the following.
- Minimum coverage required: Some states require your auto insurance policy to have more coverage than others. In some states, you’ll only need liability coverage, but others require additional coverage, such as uninsured motorist coverage and/or bodily injury coverage, which can add to the cost of your policy.
- The number of claims in the area from weather-related accidents or incidents: Generally, the more claims made in an area, the more expensive your insurance policy will be.
- Population or traffic density: The more people in an area, the greater the chance of accidents, which increases your rates.
- Cost of Living: Vehicle repair and labor costs in your state can also affect the amount of your insurance rate.
If you’re looking for auto insurance, our new comparison tool — in partnership with Bankrate — will help you find the cheapest deals.
Car insurance from the state
According to Bankrate (opens in new tab), these are currently the cheapest and most expensive states for car insurance. It’s hardly surprising that less populated states like Idaho, Maine and Vermont have the lowest levels of insurance coverage, while heavily congested urban centers top the insurance charts.
The cheapest US states for car insurance
- Maine: $941 per year, 53% below the national average
- Vermont: $1,061 per year, 47% below the national average
- Idaho: $1,133 per year, 44% below the national average
- New Hampshire: $1,162 per year, 42% below the national average
- Massachusetts: $1,262 per year, 37% below the national average
The most expensive US states for car insurance
- Florida: $3,183 per year, 58% above the national average
- New York: $3,139 per year, 56% above the national average
- Louisiana: $2,909 per year, 44% above the national average
- Nevada: $2,779 per year, 38% above the national average
- Michigan: $2,691 per year, 34% above the national average
How to save on car insurance costs
- Shopping: Since different car insurance companies calculate rates differently, it’s important to shop around for the best deal. Requesting quotes from different companies can help you choose the cheapest option available for the level of coverage you want. Plus, comparing quotes can also give you an idea of whether you’re paying too much for your current coverage.
- Take advantage of insurance discounts: To save on car insurance, be sure to take advantage of additional discounts offered by your insurance company that can help you save on your rate. Safe driving discounts, good student discounts, and multiple policy discounts are some of the most common.
- Improve your credit: Since many auto insurance companies use your credit score as a way to determine your rates (with a few states as exceptions), having a high credit score can help you save.
- Increase your deductible: Another way to save on car insurance is by increasing your deductibles. Just make sure you keep them at an affordable amount in case you have an accident and need to pay. As your out-of-pocket costs increase in the event of an accident, your premium will be lower.