State of Auto Insurance in 2021

Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021. However, premiums are still 106% more expensive when compared to 2011.

ValuePenguin used the Quadrant Information Services database to analyze 15 million quotes for drivers across the country. These, combined with RateWatch filings, were used to illustrate current and historical pictures of the auto insurance industry.

How much does auto insurance cost in my state?

The average cost of car insurance for 2021 is $1,636.

Auto insurance rates in Michigan average $7,406 a year, the highest in the U.S. and 353% higher than the national average — primarily due to the state having the highest minimum requirements for drivers.

Florida ($2,795 — 71% higher than the national average) and Rhode Island ($2,482 — 52% higher) both have some of the most expensive yearly rates compared to national averages.

For cheap car insurance, residents in Maine ($865), North Carolina ($976) and Indiana ($987) will find they have the lowest auto rates across the U.S. Auto insurance in these states is 40% cheaper, on average, than nationally.

State
2021 rates
Percent change from average
Michigan$7,406353%
Florida$2,79571%
Rhode Island$2,48252%
Louisiana$2,33743%
Kentucky$2,22836%
Arizona$2,15232%
New York$2,07527%
Delaware$2,04225%
Nevada$2,04725%
Colorado$1,99222%
Connecticut$1,95920%

District of Columbia

$1,84113%
Show All Rows

Annual auto insurance rate changes by state

Five states will see marginal increases, including New York by 1.2% and Indiana by 1.1%, despite a decrease in the national average.

The biggest year-over-year rate decreases are in Arkansas (4.8%), Ohio (4.3%) and Michigan (4.3%).

In the 45 states where rates are decreasing, the average drop is 2.3%.

Image
Image

What is the cost of a traffic violation, ticket or accident?

For 2021, we found that an individual with a traffic violation could see an average premium increase of 117% on average across these variables.

North Carolina has the largest percentage increase (255%) in auto insurance premiums on average for the violations we analyzed.

Florida auto insurance companies are the most forgiving under these circumstances. Insurers only increase premiums by 55% on average across these variables.

Individuals with DUI violations could see their premiums increase by 157% on average.

Minor violations, such as a failure to obey traffic signs, had the smallest increase to insurance premiums, rising 28%.

State
Average percent increase due to violation
DUI
Accident
Speeding
North Carolina255%$5,044$1,334$1,100
California213%$3,937$2,334$1,484
Alaska204%$1,299$1,098$3,942
Hawaii179%$4,449$1,155$844
Michigan142%$19,715$6,725$5,160
Wyoming133%$2,206$1,487$1,381
Montana131%$2,169$1,812$1,428
Massachusetts129%$2,222$1,865$1,467
Show All Rows

Percent increases due to violations are an average across all three violations analyzed in this study.

Image
Image

Future of Auto Insurance

Auto insurance companies are offering lower rates for customers in 2021 after last year saw an unprecedented low level of claims.

Auto insurance rates are likely to rebound

This is primarily due to the possibility of the economy opening up more across the U.S., which will increase travel needs and the number of accident claims.

Increase in distracted driving

Technology heavily impacts our day-to-day lives, and some people can’t put down their devices while operating a vehicle. This has drastically increased distracted driving injuries and fatalities, with nearly 3,000 yearly deaths on average.

Company-specific auto insurance plans

Car manufacturers are rolling out new company-specific insurance policies. Tesla has begun to roll out its plan in California, while General Motors has future plans, too.

Smart Technology

Vehicles are now more equipped with on-board gadgets. When getting into a crash, this can make car insurance claims amounts spike, leading to insurers increasing rates across the board for these vehicles.

How can I save money on auto insurance in 2021?

Image

Compare car insurance quotes

The most important aspect of searching for car insurance will be comparing quotes from several insurers. Our analysis shows that quotes can vary by 242% between the largest insurance companies (USAA and Farmers) for minimum coverage.

Image

Utilize car insurance discounts

Insurance companies have been offering several forms of assistance to their policyholders due to COVID-19. According to a ValuePenguin survey, many drivers are not aware, as only 31% have asked for a form of financial help.

Image

Adjust your collision and comprehensive deductible

Switching from full to minimum coverage is a great way to save a significant amount on your car insurance premiums. The two coverages can differ by close to 155% ($2,390 a year for full, versus $937 a year for minimum).

Image

Credit score improvement

Credit scores can be a key factor for auto insurance companies when determining premiums. Our analysis found the difference between a good and poor credit score can change premiums by 70%.

About this report

ValuePenguin has a mission to empower consumers with information and resources to help make smarter and more financially sound decisions. In this case, car insurance can be a difficult and time-consuming topic to understand. This report attempts to unmask some of these key issues.

In crafting the analysis, more than 15 million quotes were run on our sample driver profile across a variety of different factors and variables that affect auto insurance premiums. Additionally, it’s equally important to evaluate our sample driver against different companies, as providers tend to change their rates drastically.

Media Contact
Image

15 million

Image

35,000

Image

72

Methodology of this report

Auto insurance rate change data was compiled using RateWatch from S&P Global. The tool is updated yearly using information posted by the National Association of Insurance Commissioners (NAIC).

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. Standard rates and rate changes were for a driver profiled as having average credit history and no prior traffic violations or history. For all other quotes such as a DUI or speeding ticket, variables were changed within the quote system to get the desired outcome.

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, as your quotes may be different.

Full Coverage Policy

Coverage TypeStudy 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 and collision$500 deductible
Personal injury protectionMinimum when required by state