How Much Car Insurance Rates Vary by State

How Much Car Insurance Rates Vary by State

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The national average rate for a car insurance policy is $937 a year, but state laws cause rates to vary significantly.

A 30-year-old male driver with a fair credit score and clean driving record would pay $5,282 on average for minimum coverage in Michigan, the state with the most expensive car insurance. By contrast, he would pay only $357 on average in Iowa, the state with the cheapest minimum coverage insurance. That's over 13 times more expensive. Individual rates differ not only by state but also based on variables like age and accident history, so your own car insurance premiums may be well above or below the average costs you see below.

Comparison of the average cost of auto insurance by state

Michigan has the highest rates for auto insurance, with drivers paying an average of $5,282 a year for minimum coverage. Iowa has the cheapest auto insurance; drivers in the state pay just $357 a year on average for minimum coverage. Check out the table below to see how average auto insurance premiums in your state compare to those in other states and to the national average. States are ordered from most to least expensive.

State
Minimum coverage requirements
Minimum coverage average cost
Vs. national average
Full coverage average cost
Michigan20/40/10$5,282+464%$8,723
FloridaNone/10$2,565+174%$3,370
Rhode Island25/50/25$1,589+70%$3,847
Kentucky25/50/25$1,338+43%$3,418
Louisiana15/30/25$1,329+42%$3,525
New York25/50/10$1,323+41%$2,752
Delaware25/50/10$1,316+40%$2,513
Nevada25/50/20$1,295+38%$3,190
Washington, DC25/50/10$1,260+34%$2,793
Connecticut25/50/25$1,192+27%$2,619
New Jersey15/30/5$1,182+26%$3,013
Maryland30/60/15$1,180+26%$2,431
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The table lists the minimum liability requirements in each state. Known as "split limits," these numbers represent the maximum amount your insurer will pay to cover 1) bodily injury to one individual, 2) bodily injury to all people involved in an accident and 3) all the property damage you cause to others in an accident.

The table also lists the average rates for full coverage, as well. Full coverage adds collision and comprehensive coverages on top of whatever the minimum state requirements are. Collision and comprehensive coverages ensure your own car is protected in the event of an accident, whereas minimum coverage in most states only protects damage done to another driver's person or property.

Because car insurance is regulated at the state level, different states have different requirements for the minimum coverage drivers must have to drive legally on the road. There are typically five different kinds of insurance that states can require drivers to carry. These include:

  • Bodily injury liability (BI)
  • Property damage liability (PD)
  • Uninsured/underinsured bodily injury (UIM)
  • Uninsured/underinsured property damage (UIM)
  • Personal injury protection (PIP) or another first-party benefit insurance

With a small number of exceptions, most states require drivers to carry auto insurance. All states except Florida require policyholders to have bodily injury liability, and all 50 states as well as the District of Columbia require drivers to have property damage liability. About half of all states require some kind of uninsured or underinsured coverage, and 16 states require PIP.

These differences in minimum coverage requirements partly account for the variations in car insurance cost, so be sure you understand the details of what coverage is required in your state before you begin shopping.

No states require drivers to carry full coverage, which means you'll pay extra for this added protection. Even in Maine, the state with the smallest difference between full and minimum coverage policies, drivers who opt for full coverage pay an extra $779 each year. Consider the worth of your car and whether or not it makes sense to pay more for full coverage.

If it does, be sure to get quotes from multiple insurers both large and small to see who can offer you your best rates. Our research found that, of the major national insurers, USAA and State Farm offer the cheapest rates for full coverage. You may find a better deal with a small local or regional insurer, though, so be sure to shop around before purchasing a policy.

What states have the cheapest car insurance?

Iowa, South Dakota, Hawaii, Wyoming and Alaska are the states with the lowest rates for minimum car insurance. If living in a state with affordable auto insurance premiums is important to you, these states are some of the cheapest places to live for car insurance.

Iowa. Boasting an average annual premium of just $357 for minimum coverage, Iowa is the state where you will find the cheapest car insurance — 62% cheaper than the national average. Less than 10% of the state's drivers are uninsured, reducing risk for insurers and keeping rates low for residents. Iowa shoppers should consider getting a policy with IMT (Wadena), Grinnell Mutual or State Farm, as our research found that these companies offer the cheapest minimum coverage auto insurance in the state.

South Dakota. Much like Iowa, South Dakota's rural landscape and low percentage of uninsured drivers result in cheap minimum car insurance rates: The average annual policy in the state costs $420, which is 55% lower than the national average. We recommend that drivers in South Dakota get a policy with American Family, State Farm or Farm Bureau, since these companies offer the lowest rates for minimum car insurance coverage.

Hawaii. The average annual premium in Hawaii costs only $475, making it 49% cheaper than average. Given the fact that Hawaii also requires PIP for all drivers, these low rates are particularly impressive. We found that USAA and Island Insurance offer the cheapest rates for minimum coverage, so drivers in Hawaii shopping around for affordable rates should keep these two insurers in mind.

Wyoming. One of the cheapest states to have auto insurance, Wyoming drivers pay 48% less than the national average. Our analysis showed that the average annual policy in Wyoming costs just $485, with State Farm and Geico offering the most affordable minimum coverage policies. Limited traffic on rural roads, a low population and a small number of uninsured motorists help insurers keep rates affordable for residents of the Cowboy State.

Alaska. Despite having a fairly high percentage of uninsured motorists, Alaska is one of the states with the cheapest car insurance rates. A minimum coverage policy in Alaska costs just $485 each year — just under half as much as the national average. Drivers in The Last Frontier state should consider a policy with Geico or State Farm, as these major national insurers offer the cheapest rates for minimum coverage.

Car insurance rates by city

Car insurance costs do not just vary by state; they also vary significantly by city. As a general rule, the more populous the city you live in, the more expensive your auto insurance rates will be. This is partly because drivers who frequently travel on busy roads are more likely to get into an accident. Insurers pass this risk on to policyholders in the form of increased premiums.

In Texas, for instance, an annual minimum coverage policy car is $285 more in Houston, the state's most populous city, than in Austin.

City
Population
Average premium minimum coverage
Houston2,320,268$1,284
San Antonio1,547,253$1,072
Austin978,908$999

Population data based off July 2019 estimates from Census.gov

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Car insurance rates by ZIP code

Insurance companies price car insurance by ZIP code as well as by city. If you compare one ZIP code with another, you'll find that average car insurance rates can vary by more than a third — even within the same city.

Take Houston as an example: We found that if a 30-year-old driver with a clean driving record lives in ZIP code 77036, he will pay $1,415 on average for minimum coverage auto insurance on his Honda Civic EX. By contrast, if he lives in ZIP code 77059, he will pay just $1,159 — a $256 difference.

Don't get caught off-guard if your auto insurance rates change when you move across town. Be sure to shop around for the cheapest auto insurance rates in your new ZIP code to make sure you're getting the best deal.

What states have the highest car insurance rates?

Michigan, Florida, Rhode Island, Kentucky and Louisiana are the top five most expensive states for car insurance. Drivers in these states have some of the highest auto insurance premiums in the country, though the reasons for these rates vary from state to state.

Michigan. The Wolverine State has by far the highest car insurance premiums in the country: Drivers pay an average of $5,282 a year for minimum coverage — 464% higher than the national average. Michigan's unique approach to auto insurance accounts for this expensive auto insurance. Prior to July 2020, drivers were required to carry unlimited PIP insurance. This drove up costs and caused many drivers to go without insurance altogether; at 20.3%, the state has one of the highest rates of uninsured motorists in the country.

Thanks to recent reform, drivers now need only carry $250,000 in PIP insurance, and drivers with Medicare can opt out altogether. This will significantly reduce annual rates in the coming years and make auto insurance more accessible for drivers, which in turn will improve safety on the roads. Michigan drivers may want to consider purchasing a minimum coverage policy from Auto-Owners Insurance or USAA, as our analysis found these two insurers had the cheapest policies for minimum coverage.

Florida. Florida not only holds the dubious distinction of having the highest percentage of uninsured motorists in the country, but it is also one of the most expensive states in which to insure a car. Floridians pay an average of $2,565 for an annual minimum coverage policy, or about 174% more than the national average.

In addition to a high percentage of uninsured drivers, Florida's frequent exposure to natural disasters causes insurers to charge more than they do in states with more stable weather. Geico, State Farm and Liberty Mutual offer the most affordable quotes for minimum coverage, so we recommend that Florida shoppers purchase a policy from one of these companies.

Rhode Island. Rhode Island ranks as the third most expensive state for auto insurance. Residents pay $1,589 on average for an annual premium with minimum coverage, making rates 70% higher than the national average. Our analysis found that Progressive, Nationwide and Geico offered the cheapest minimum coverage rates to Rhode Island drivers.

Kentucky. As a no-fault state, Kentucky requires drivers to carry PIP insurance. This raises prices 43% above the national average: Kentucky drivers pay about $1,338 a year for minimum coverage insurance, making it one of the most expensive places for car insurance in the country. State Farm offers residents of the Bluegrass State the most affordable minimum coverage.

Louisiana. With residents paying an average of $1,329 for minimum coverage, Louisiana has the fifth-highest car insurance rates in the country — a trend driven partly by the state's high percentage of DUI deaths. ValuePenguin's analysis found that the state had the ninth-highest fatal DUI rates, experiencing 4.63 DUI deaths for every 100,000 residents. This, combined with the state's vulnerability to extreme weather incidents, causes insurers to charge rates 42% higher than the national average. Pelican State drivers should consider a policy from USAA and State Farm; according to our analysis, these companies quoted the most affordable annual policies for minimum coverage.

No-fault state vs. fault states

Oftentimes, states with the most expensive car insurance rates experience these high costs because of a legal structure known as "no-fault." No-fault states require drivers to carry PIP insurance that covers their own medical bills in case of an accident and limit the rights of a driver to sue for damages after an accident. Of the twelve no-fault states, three appear in our analysis of the states with the highest auto insurance premiums.

Fault states take the opposite approach. Rather than having drivers cover their own injuries, as in no-fault states, the person who caused the car accident must use their liability insurance to pay for the other driver's injuries.

The twelve no-fault states are:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Utah

What else besides location impacts my auto insurance premium?

In addition to location-specific factors like ZIP code and crime rates, insurers also include personal demographic details about the driver when setting insurance rates. These variables include:

  • Driving record. If you've accrued speeding tickets or had accidents in the past, insurers will assume you are a high-risk driver and raise your premiums accordingly.
  • Marital status. Insurers charge married drivers less than single drivers, as married drivers are viewed as more financially stable and less likely to engage in risky behavior.
  • Gender. Men spend more time on the road and get into more accidents than women do. With the exception of a small handful of states, insurers generally charge men more than women until they hit their 30s to reflect this increased risk.
  • Make and model of car. Drive a luxury or a exotic vehicle? You'll pay more to insure it. The more expensive your car is to repair, the more you'll pay in annual premiums.
  • Age. Senior citizens and young drivers under the age of 30 are far more accident-prone than middle-aged drivers. Accordingly, they pay far more for insurance, with rates gradually dropping by thousands of dollars between the ages of 16 and 30 and then rising again after age 60.
  • Credit score. Unless you live in California, Massachusetts or Hawaii, your credit score will likely impact your insurance rates. A solid credit score will get you a lower premium; a poor credit score will get you a higher one.
  • Lapse in coverage. Gone without auto insurance coverage for less than a month? Our research found that insurers will increase your rates. Gone without for more than a month? You could see an increase of 29%.

Every insurer has its own unique formula for developing rates, with some insurers emphasizing certain factors more strongly than others. That's why it's so important to shop around at multiple insurers. Only by comparing quotes can you maximize your chances of getting your best rate.

Will my state see an increase in auto insurance premiums?

Insurers have continued to increase car insurance rates year after year, so it's likely that your state will see an increase in auto insurance by the time 2020 ends and 2021 arrives.

Profit loss is a key factor likely causing insurance companies to drive up rates. In 2018, the 10 largest insurers saw an average profit loss of 1.4% and raised rates by 1.6% to compensate. One major trend driving profit losses and rate increases is natural disasters. According to Aon, economic losses from natural disasters reached record highs in the 2010s and are expected to increase due to climate change and weather variability.

If you live in a state particularly vulnerable to natural disasters — whether that be hurricanes, flooding or fires — you will likely see your auto insurance rates go up in the coming years. Consider purchasing comprehensive insurance, which protects your vehicle from non-collision losses such as weather damage.

How moving to a different state might impact your car insurance premium

Moving across state lines will impact your auto insurance rates. As a general rule, if the state you're moving to has higher requirements for minimum coverage, you'll pay higher premiums, and if it has lower requirements, you'll pay lower premiums.

Those who move from California to Texas, for instance, will find that their rates will increase. If you compare the cost of car insurance in Texas versus California, you'll find that Texas drivers pay 55% more on average for minimum coverage than California drivers do.

This is partly because Texas has higher minimum coverage requirements than California, requiring drivers to carry bodily injury liability limits of $30,000 per person and $60,000 per accident, with $25,000 in property damage liability limits. California, by contrast, only requires drivers to carry bodily injury liability limits of $15,000 per person and $30,000 per accident, with $5,000 in property damage liability limits.

Other policyholders will see a decrease in their rates when they move. If you compare rates in New Jersey versus Pennsylvania, you'll find that Pennsylvania drivers pay 48% less on average for car insurance — despite the fact that the states have identical minimum coverage requirements and are both no-fault states. Insurers also factor in the number of uninsured drivers in a state when calculating insurance costs, and New Jersey has almost twice as many uninsured drivers as Pennsylvania does: 14.9% to Pennsylvania's 7.6%.

Be sure to budget for these changes when you calculate the cost of living in your new state. Remember to factor in the cost of changing your registration and license as well, as many states require drivers to pay a fee to the department of motor vehicles.

Methodology

We collected quotes across 50 states and Washington, D.C., for 51 insurance companies. Although 51 insurance companies were included in the analysis, insurance company rates were only included in our company lists if their policies were available in at least five states.

Our base driver was a 30-year-old male who drove a 2015 Honda Civic EX, and quotes were drawn from all available ZIP codes in each state. The driver was profiled as having no or poor credit history, which makes him equivalent to a driver with below-fair to poor credit, according to our data source, Quadrant Information Services.

When our driver had a full coverage policy, we gave him coverage limits slightly above any one state's minimum requirements:

Coverage type
Study limits
Bodily liability$50,000 per person/$100,000 per accident

Property damage
$25,000 per accident

Uninsured/underinsured motorist BI
$50,000 per person/$100,000 per accident
Comprehensive & collision$500 deductible
Personal injury protectionMinimum when required by state
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Our rates for minimum coverage policies represent the average cost of a policy that meets any state's minimum required auto insurance coverage.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Sources

Aon

Nancy is a Technical Writer at ValuePenguin, focusing primarily on auto insurance. Prior to joining the ValuePenguin team, she worked as a public relations professional, helping clients develop and publish op-eds in outlets such as CNN, U.S. News and USA Today. She holds a master's degree in English from Georgetown University.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.