The average cost of car insurance in the United States is $1,502 per year, though it can certainly vary from person to person. Furthermore, your car insurance rate depends on a myriad of factors, starting with the level of coverage you choose (liability vs. full), to the geographic area where you live to your driving history.
Though car insurance can be expensive, maintaining coverage on your vehicle is a worthwhile investment. And if you shop around, you’ll find that there are many discounts available to help you save while protecting your car.
Average Car Insurance Costs by Company
The cost of car insurance can vary from carrier to carrier. While State Farm has some of the lowest premium averages, Liberty Mutual’s rates average the highest among popular providers.
|Insurance Provider||Average Annual Premium|
Car Insurance Rates by State
The average annual premium fluctuates from state to state and even from zip code to zip code. Premiums are affected by local factors including the amount of traffic in the area and crime/theft rate.
|State||Average Annual Premium|
What coverage is right for me?
When deciding on the amount of coverage you want, you can opt for liability coverage that meets your state’s minimum standards, or you can select full, comprehensive coverage.
- Liability coverage: Liability coverage pays for all damages you cause to others. This type of insurance does not cover damages to you or your vehicle caused by others. This kind of coverage is appealing for older cars that don’t hold much value.
- Comprehensive coverage: Full insurance covers damages you cause to others, as well as damages to you or your car. Full coverage is a better option when you want maximum protection.
Minimum requirements vary widely by state but typically include liability coverage only. Nearly half require underinsured or personal injury protection coverage. The three minimum liability numbers represent (in thousands of dollars) the amount of coverage you must carry for bodily injury per person, bodily injury per accident (if more than one person is injured), and property damage per accident. For example, if your policy includes 25/50/25 coverage, you’re insured for the following:
- $25,000 towards the injury of one person
- $50,000 towards the injury of all persons injured in the accident
- $25,000 towards any property damage that occurs
Keep in mind that liability insurance only covers damage caused to other people and vehicles/property incurred by you. Unlike comprehensive car insurance, this minimum coverage does not provide coverage for your personal injuries or damages to your car.
Beyond bodily injury and property damage liability, many states have additional requirements for car insurance coverage. For example, Arizona requires insured drivers to carry personal injury protection insurance, or PIP. Connecticut required both uninsured motorist insurance and underinsured motorist insurance. These coverages help pay in the even that the other person involved in your vehicle incident does not have car insurance or does not carry enough insurance to cover the incident. Interestingly, New Hampshire simply requires that drivers be able to bear the brunt of all financial responsibility.
|State||Insurance required||Minimum liability limits (in thousands of dollars) *|
|AL||Bodily Injury & Property Damage Liability||25/50/25|
|AK||Bodily Injury & Property Damage Liability||50/100/25|
|AZ||Bodily Injury & Property Damage Liability||15/30/10|
|AR||Bodily Injury & Property Damage Liability, Personal Injury Protection||25/50/25|
|CA||Bodily Injury & Property Damage Liability||15/30/5|
|CO||Bodily Injury & Property Damage Liability||25/50/15|
|CT||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/20|
|DE||Bodily Injury & Property Damage Liability, Personal Injury Protection||25/50/10|
|DC||Bodily Injury & Property Damage Liability, Uninsured Motorist||25/50/10|
|FL||Property Damage Liability, Personal Injury Protection||10/20/10|
|GA||Bodily Injury & Property Damage Liability||25/50/25|
|HI||Bodily Injury & Property Damage Liability, Personal Injury Protection||20/40/10|
|ID||Bodily Injury & Property Damage Liability||25/50/15|
|IL||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/20|
|IN||Bodily Injury & Property Damage Liability||25/50/25|
|IA||Bodily Injury & Property Damage Liability||20/40/15|
|KS||Bodily Injury & Property Damage Liability, Personal Injury Protection||25/50/25|
|KY||Bodily Injury & Property Damage Liability, Personal Injury Protection, Uninsured Motorist, Underinsured Motorist||25/50/25|
|LA||Bodily Injury & Property Damage Liability||15/30/25|
|ME||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist, Medpay||50/100/25|
|MD||Bodily Injury & Property Damage Liability, Personal Injury Protection, Uninsured Motorist, Underinsured Motorist||30/60/15|
|MA||Bodily Injury & Property Damage Liability, Personal Injury Protection||20/40/5|
|MI||Bodily Injury & Property Damage Liability, Personal Injury Protection||20/40/10|
|MN||Bodily Injury & Property Damage Liability, Personal Injury Protection, Uninsured Motorist, Underinsured Motorist||30/60/10|
|MS||Bodily Injury & Property Damage Liability||25/50/25|
|MO||Bodily Injury & Property Damage Liability, Uninsured Motorist||25/50/25|
|MT||Bodily Injury & Property Damage Liability||25/50/20|
|NE||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/25|
|NV||Bodily Injury & Property Damage Liability||25/50/20|
|NH||Financial Responsibility only||25/50/25|
|NM||Bodily Injury & Property Damage Liability||25/50/10|
|NC||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||30/60/25|
|OH||Bodily Injury & Property Damage Liability||25/50/25|
|OK||Bodily Injury & Property Damage Liability||25/50/25|
|PA||Bodily Injury & Property Damage Liability, Personal Injury Protection||15/30/5|
|RI||Bodily Injury & Property Damage Liability||25/50/25|
|SC||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/25|
|SD||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/25|
|TN||Bodily Injury & Property Damage Liability||25/50/15|
|TX||Bodily Injury & Property Damage Liability, Personal Injury Protection||30/60/25|
|UT||Bodily Injury & Property Damage Liability, Personal Injury Protection||25/65/15|
|VT||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/10|
|VA||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/20|
|WA||Bodily Injury & Property Damage Liability||25/50/10|
|WV||Bodily Injury & Property Damage Liability, Uninsured Motorist, Underinsured Motorist||25/50/25|
|WI||Bodily Injury & Property Damage Liability, Uninsured Motorist, Medpay||25/50/10|
|WY||Bodily Injury & Property Damage Liability||25/50/20|
* Bodily Injury per Person/Bodily Injury per Occurrence/Property Damage per Occurrence
Additional factors that determine your rate
Once you determine the number of coverages you want your insurance policy to include, consider next the other factors that can affect the cost of your annual premium. Car insurance carriers take into account a variety of factors that deal with your car’s value and the likelihood of you being involved in an accident. Some of these factors include:
- Geographic location: The area where you reside plays a significant role in determining the price of your car insurance. While state averages don’t vary too widely, living in certain cities and even neighborhoods can drastically impact the cost of coverage. For example, in New York, Brooklyn neighborhoods see the highest average premiums because of their high population density, increased risk of car break-ins and theft, and a higher number of commuters. Meanwhile, Manhattan drivers pay less because the area is more apt to use public transportation to get around.
- Type of Car: The type of car you drive can impact the cost of your car insurance policy because it’s based, in part, on the value of your car. If you have a brand new, expensive sports car, it will cost more to replace or repair it, so your premium will likely cost more. On the other hand, if you have an older car, you may see costs fall. Furthermore, the premium can vary based on the vehicle type’s safety rating and theft rating.
- Driving History: One of the easiest ways to see your car insurance premium skyrocket is by getting into car accidents or accumulating traffic tickets. These negative incidents indicate to your insurance carrier that you are a higher-risk driver.
- Credit Score: The statistics show that drivers with poor credit file more claims, and more expensive claims, than drivers with good credit. In fact, drivers with poor credit can face an additional $100 or more per month to pay their insurance premiums.
- Age: Age is a particularly important factor in determining your car insurance premium if you’re a young driver. Data shows that teenage drivers are more reckless and become involved in more accidents than any other age group. Therefore, young drivers face much higher premiums when compared to older drivers.
- Gender: Though only relevant for those drivers under the age of 25, gender can play a role in how much you pay for car insurance. Male drivers 24 and younger pay an average of $10 less per year for their car insurance than their female counterparts.
How to save money on car insurance
Most car insurers carriers provide many avenues for scoring discounts on your annual insurance premium. The list that follows is by no means exhaustive, so be sure to ask your local insurance agent about any other discounts that may apply in your situation. Popular ways to save money with car insurance discounts include:
- Safe Driver Discounts: Most car insurance providers offer safe driver discounts for drivers who have completed an eligible safety course within the past couple of years.
- Multi-car discounts: If your household has multiple vehicles, consider placing them all on one insurance policy to qualify for multi-car discounts.
- Bundling insurance policies: You can often score better insurance premiums overall when you bundle your car insurance policy with a life or renter’s insurance policy.
- Good student discounts: Many insurance carriers offer discounts for young drivers with good grades in school. For example, Nationwide extends its good student discount to those drivers aged 16-24 enrolled full-time in high school or college who sustain a B average. You’ll just need to provide academic evidence in the form of an up-to-date grade report or a form signed by a school administrator.
- Paying the annual lump sum: If you can afford to pay your annual car insurance premium at once, you’ll likely save money. Many insurance companies provide a discount for those drivers willing to pay upfront because it is more convenient and requires less processing for them.
What discounts are available for car insurance?
From taking safe driving courses to bundling your car insurance policy with other policies like renter’s insurance to installing anti-theft devices, there are a variety of ways for you to save. Ask your carrier about the insurance discounts they offer to see how you can qualify.
Is full-coverage liability worth it?
Full-coverage liability is worth it, especially if you spend a lot of time driving, you’re still making payments on the vehicle, or if your car has a high cash value. The only advisable time to stick to the bare state minimum requirements is if the car is paid in full and its overall value is not worth the annual premium.
Who pays more for car insurance, men or women?
On average, women pay $1,480 for annual car insurance premiums, while men pay an average of $1,470 per year. However, when it comes to men under 25, there’s no doubt about it–they average paying about 14% more than women in the same age bracket.
Does my age affect the cost of my car insurance premium?
Yes, your age can play a role in determining the cost of your car insurance. For example, because they’re less experienced drivers who tend to be more impulsive, teenagers often face higher insurance premiums.