How Much Car Insurance Rates Vary by State

How Much Car Insurance Rates Vary by State

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The average cost of car insurance varies by $4,004 per year depending on the state in which you live.

The national average rate for a minimum coverage car insurance policy is $784 a year, but state laws and other factors cause rates to vary significantly.

A 30-year-old male driver with a fair credit score and clean driving record would pay $4,386 per year on average for minimum coverage in Michigan, the state with the most expensive car insurance. By contrast, the driver would pay only $382 on average in Iowa, the state with the cheapest minimum coverage insurance.

That's more than 11 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 $4,386 a year for minimum coverage. Iowa has the cheapest auto insurance — drivers in the state pay just $382 a year on average for minimum coverage. See how average auto insurance premiums in your state compare to those in other states and to the national average.

State
Average min coverage cost
Average full coverage cost
Michigan$4,386$7,161
Florida$2,072$2,962
Rhode Island$1,197$2,750
Delaware$1,153$2,239
Nevada$1,138$2,636
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Full coverage adds collision and comprehensive coverages on top of liability. Collision and comprehensive coverages ensure your own car is protected in the event of an accident, while 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, states have different requirements for the minimum coverage drivers must have to drive legally. There are typically five kinds of insurance that states can require drivers to carry, including:

  • 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 few 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 property damage liability. About half of all states require some kind of uninsured or underinsured coverage, and 15 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, and 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 $599 each year. Consider the worth of your car and whether it makes sense to pay more for full coverage.

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Either way, get car insurance quotes from multiple insurers both large and small to find 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 it pays to shop around before purchasing a policy.

Which states have the cheapest car insurance?

Iowa, North and South Dakota, Wisconsin and Wyoming 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 or car insurance.

Iowa. With an average annual premium of just $382 for minimum coverage, Iowa is the state where you will find the cheapest car insurance — 51% cheaper than the national average. Iowa drivers should consider getting a policy with IMT (Wadena), Auto-Owners 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 $387, which is 51% lower than the national average. We recommend that drivers in South Dakota get a policy with Auto-Owners, American Family or State Farm, since these companies offer the lowest rates for minimum car insurance coverage.

Wisconsin. The average annual premium in Wisconsin costs only $396, making it 49% cheaper than average. We found that State Farm, American Family and Erie offer the cheapest rates for minimum coverage, so Wisconsin drivers shopping around for affordable rates should keep these three insurers in mind.

North Dakota. A minimum coverage policy in North Dakota costs just $422 each year — 46% cheaper than the national average. Drivers in North Dakota should consider a policy with American Family or State Farm, as these insurers offer the cheapest rates for minimum coverage.

Wyoming. As one of the cheapest states to have auto insurance, Wyoming drivers pay 46% less than the national average. Our analysis showed that the average annual policy in Wyoming costs just $422, 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.

Car insurance rates by city

Car insurance costs vary not just 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 is $382 more in Houston, the state's most populous city, than in Austin.

City
Population
Average premium minimum coverage
Houston2,304,580$2,301
San Antonio1,434,625$2,035
Austin961,855$1,920

Population data based off the 2020 Census

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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 $1,009 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 $790 — a $219 difference.

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Don't be too alarmed 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, Delaware and Nevada have the most expensive car insurance rates. Drivers in these states have some of the highest auto insurance premiums in the country, though the reasons for these rates vary by state.

Michigan. The Wolverine State has by far the highest car insurance premiums in the country: Drivers pay an average of $4,386 a year for minimum coverage — 459% 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 led to many drivers going without insurance altogether.

Thanks to recent reform, drivers now need only carry $250,000 in PIP insurance, and those 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 one of the highest percentages 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 $2,072 for an annual minimum coverage policy, or about 164% more than the national average.

In addition to a high percentage of uninsured drivers, Florida's frequent exposure to natural disasters leads to insurers charging more than they do in states with more stable weather. Geico and State Farm 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 $1,197 on average for an annual premium with minimum coverage, making rates 53% higher than the national average. Our analysis found that Progressive, Nationwide and Geico offered the cheapest minimum coverage rates to Rhode Island drivers.

Delaware. Despite not being a no-fault state, Delaware requires drivers to carry PIP insurance. This raises prices 51% above the national average: Kentucky drivers pay about $1,183 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 First State the most affordable minimum coverage.

Nevada. With residents paying an average of $1,138 for minimum coverage, Nevada has the fifth-highest car insurance rates in the country. A combination of factors around cities such as Las Vegas and Reno, which account for much of the state's population, causes insurers to charge rates 45% higher than the national average. Silver State drivers should consider a policy from Progressive and State Farm; according to our analysis, these companies quoted the most affordable annual policies for minimum coverage.

No-fault state vs. fault states

States with the most expensive car insurance rates often 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 12 no-fault states, four 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 12 no-fault states are:

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

A few states, including New Jersey and Pennsylvania, allow drivers to pay more to opt out of the no-fault system. This allows them to sue for "pain and suffering."

Some states, notably Delaware, Maine and Oregon, require PIP, even though they are not no-fault states.

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. With the exception of a few 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 an 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 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. Several states, including Michigan, Hawaii and California, have banned the use of credit score to set rates. Unless you live in one of these six states, your credit history 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 your state will likely see an increase in auto insurance by 2022.

The most likely key factor driving the increase in rates is a trend of companies having to pay more in claims and adjustments than they are earning on policies. Insurers usually raise premiums in these situations to ensure they don't lose money. 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 it’s 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.

You can use our car insurance estimator to get an idea of how much your car insurance rates might change if you move states.

For example, drivers who move from California to Texas 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 8% 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. By contrast, California 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 49% less on average for minimum-coverage car insurance — despite the fact that the states have identical minimum coverage requirements and are both no-fault states.

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.

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Methodology

We collected quotes across 50 states and Washington, D.C., for 51 insurance companies. Although 37 insurance companies were included in the analysis, insurance company rates were only included in our 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

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.

Additional sources

  • Aon 2020 Weather, Climate & Catastrophe Insight Report

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.