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Annual Report

The true cost of auto insurance in 2022

The true cost of car insurance refers to the average proportion of income drivers spend on auto insurance coverage. Nationally, drivers spend an average of $1,771 per year on full coverage car insurance, which accounts for 2.57% of the average American’s annual income. The average annual income in the United States is $68,852, according to data collected from the U.S. Census Bureau. The average percentage individuals spend on their car insurance varies widely by state and metropolitan area, and the regions where car insurance has the greatest impact on drivers’ finances may surprise you.

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Nationally, drivers spend nearly 3 percent of their annual income insuring their cars on average. Drivers in Louisiana, which has the highest true cost of auto insurance in the country according to our study, spend even more, doling out more than 5 percent of their annual income to insure their cars. Maine drivers, who enjoy the lowest true cost of car insurance in 2022, spend just over 1 percent of their income on car insurance.
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How much do Americans pay for auto insurance?

Explore the true cost of auto insurance in all 50 states and the top 25 metro statistical areas (MSAs). True cost rankings are determined by the average total percentage of income spent on car insurance and not average premiums. The higher the ranking, the higher the true cost of car insurance.

The table below allows you to explore what proportion of income drivers are spending on auto insurance by state. Nationally, drivers spend an average of 2.57% of their income on car insurance coverage. In certain regions, drivers spend a much higher percentage than average, while in others, drivers spend a lower percentage.

Louisiana drivers spend the highest proportion of their money on auto insurance, at 5.26% of their income, followed by Florida at 4.42%. And, of the metro areas analyzed, Tampa and Miami drivers spend the highest percentage of income on their car insurance, delegating an eye-popping 4.49% and 5.58% of their annual income to auto insurance coverage, respectively. One reason these states may experience high true costs is that hurricanes and flooding are common, which may drive up insurance rates. Paired with the relatively low median incomes in both states, residents end up putting a significant portion of their budget toward car insurance.

Your geographic location isn’t the only factor that affects your car insurance rate. Life events like a change in your credit score (in most states), driving history and adding a teen to your policy usually affect your rates and the proportion of your income spent on car insurance.

True cost rank by state

True Cost rank
Average annual full coverage premium
Percent difference from national average
Alabama 41 $1,760 0.57%
Alaska 19 $1,686 -0.40%
Arizona 31 $1,743 0.08%
Arkansas 42 $1,806 0.83%
California 30 $2,190 0.00%
Colorado 29 $2,019 -0.03%
Connecticut 11 $1,533 -0.69%
Delaware 34 $1,963 0.18%
Florida 49 $2,762 1.85%
Georgia 39 $1,985 0.48%
Hawaii 1 $1,206 -1.16%
Idaho 8 $1,065 -0.89%
Illinois 18 $1,548 -0.41%
Indiana 15 $1,242 -0.59%
Iowa 13 $1,254 -0.63%
Kansas 33 $1,802 0.18%
Kentucky 45 $1,954 0.92%
Louisiana 50 $2,864 2.69%
Maine 2 $876 -1.13%
Maryland 17 $1,931 -0.46%
Massachusetts 3 $1,296 -1.12%
Michigan 47 $2,345 1.18%
Minnesota 21 $1,692 -0.37%
Mississippi 44 $1,701 0.89%
Missouri 37 $1,861 0.42%
Montana 40 $1,795 0.51%
Nebraska 25 $1,538 -0.21%
Nevada 46 $2,426 1.17%
New Hampshire 5 $1,182 -1.10%
New Jersey 20 $1,891 -0.40%
New Mexico 32 $1,489 0.15%
New York 48 $2,996 1.30%
North Carolina 23 $1,392 -0.33%
North Dakota 12 $1,225 -0.66%
Ohio 14 $1,200 -0.63%
Oklahoma 43 $1,902 0.86%
Oregon 16 $1,371 -0.58%
Pennsylvania 36 $2,002 0.40%
Rhode Island 26 $1,847 -0.08%
South Carolina 28 $1,464 -0.06%
South Dakota 27 $1,542 -0.08%
Tennessee 24 $1,383 -0.23%
Texas 35 $1,868 0.21%
Utah 9 $1,449 -0.72%
Vermont 6 $1,000 -1.09%
Virginia 4 $1,340 -1.11%
Washington 7 $1,313 -0.97%
West Virginia 38 $1,527 0.46%
Wisconsin 10 $1,249 -0.70%
Wyoming 22 $1,510 -0.34%

True cost rank by metro

True Cost rank
Average annual full coverage premium
Atlanta 15 $2,084
Baltimore 10 $2,064
Boston 1 $1,328
Charlotte 7 $1,480
Chicago 8 $1,622
Dallas 13 $1,899
Denver 12 $2,103
Denver 23 $2,872
Houston 16 $1,994
Los Angeles 20 $2,477
Miami 25 $3,508
Minneapolis 6 $1,722
New York 21 $3,082
Orlando 22 $2,510
Philadelphia 19 $2,395
Phoenix 14 $1,845
Portland 4 $1,452
Riverside-San Bernardino 18 $2,083
San Antonio 17 $1,824
San Diego 9 $1,968
San Francisco 5 $2,190
Seattle 2 $1,426
St Louis 11 $1,742
Tampa 24 $3,017
Washington DC 3 $1,664
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Factors that impact the cost of your car insurance

Credit Good
Monitor your credit
Credit tier Average annual premium
Poor credit $3,002
Average credit $1,907
Good credit $1,771
Excellent credit $1,556
*Premium listed for full coverage policies

The average cost of car insurance in the United States is $1,771 per year, claiming 2.57% of the average American’s annual income. Your individual car insurance rate depends on personal characteristics, so it will likely differ from the national average. Several factors that impact your car insurance include things like credit score (in most states), vehicle make and model, driving record and the characteristics of drivers insured on your policy.

Credit score

Policyholders with high credit scores tend to file fewer claims than policyholders with lower credit scores. For that reason, car insurance companies in most states use your credit-based insurance score to help determine your premium. One way to lower your car insurance premium is to improve your credit score. On average, drivers with excellent credit pay a shocking $1,146 less per year for their car insurance than policyholders with poor credit. Note that the use of credit as a rating factor is prohibited in California, Hawaii and Massachusetts. In Michigan, while insurers are not allowed to use your credit score as a rating factor, they can use some of the information that contributes to your credit score to rate your policy, such as a history of missed or late payments.

Standout statistics:
  • Wisconsin drivers carrying full coverage car insurance experience an average rate increase of $4,128 — the highest of any state — when their credit score goes from ‘good’ to ‘poor.’
  • Of the states that use credit-based insurance scores as a rating factor, North Carolina drivers experience the lowest average increase on full coverage car insurance — only $351 — when their credit score goes from ‘good’ to ‘poor.’

Vehicle choice

Your vehicle choice significantly affects your car insurance rate. On average, the cheaper your vehicle, the lower your car insurance rate will be. Typically, sedans are cheaper to insure than coupes or SUVs. Luxury vehicles, sports cars and vehicles equipped with advanced technology will likely be much more expensive to insure than a basic sedan. For instance, for full coverage car insurance, it costs $747 more per year to insure a luxury BMW330i than a Ford F-150 truck.

Generally, the safer your vehicle is, the cheaper it will be to insure. If a vehicle comes equipped with top-notch safety features, drivers may see lower insurance rates — although it will depend on how expensive those safety features are to replace. Expensive sensors and cameras can drive your car insurance cost higher in some cases. In addition to safety features, your vehicle’s weight has a bearing on safety. Heavy vehicles are more likely to protect the passengers and driver, which could help lower insurance costs. However, heavy vehicles can also cause significant damage to another vehicle in an accident, which could increase premiums. As a result, you may see heavy vehicles like the Ford F-150 with average rates around the national average, rather than much higher or lower.

If you’re on the hunt for a new vehicle, you may want to compare the following car insurance averages. While your actual rates will differ, these rates offer a starting point for comparison.

Driving record

Your driving record significantly impacts your car insurance rate, since insurance companies often see a poor driving record as an indication that you’re likely to file a claim in the future. An at-fault accident can drive up your rates considerably, but of any incident, a DUI on your record increases your rates the most. Drivers with a DUI pay an average of $1,650 more per year for their full coverage insurance than the national average. After an incident, you may want to check with your car insurance provider to see if it offers discounts for participating in a telematics program or a driver’s safety course.

Standout statistics:
  • After getting into an at-fault car accident, Rhode Island residents see the lowest insurance rate increases of any state, with an average added cost of only $50 per year.
  • California drivers see an average annual rate increase of $1,436 after an at-fault accident, the highest of any state. And Los Angeles drivers experience an average increase of $1,636 per year after causing an accident, the highest of any metro area we analyzed.


Life events may also affect your car insurance rate. Adding a teen to your car insurance policy can cause one of the most significant rate increases for the average driver. And, in many states, your marital status can affect your car insurance rates. Married drivers pay an average of $103 less per year for full coverage car insurance than the national average. However, married couples with a teen on their policy pay an average of $1,998 more than the national average.

Standout statistics:
  • After Hawaii, which does not use age to calculate insurance premiums, Iowa drivers see the lowest average annual premium increase when adding a teen to their car insurance policy, with a total increase of just $1,034 per year over the state’s average annual rate of $1,254.
  • Of the metros analyzed, Portland has the lowest average annual rate increase after adding a teen driver, at just $1,827. Meanwhile, Miami has the highest average rate increase of $3,891 per year after adding a teen driver.

Relocate in your metro

Car insurance rates may vary between ZIP codes in the same metropolitan area, since factors like crash statistics and cost of living vary between neighborhoods. For instance, Hopkinton, Massachusetts lies 30 miles west of Boston, and its distance from the city likely contributes to lower crash rates and a lower cost of living than neighborhoods like South Boston or North End. However, before relocating to a different ZIP code, you may want to consider your commute costs. Will you save money on your car insurance but pay more in gas and vehicle maintenance costs?

You may save even more by relocating to a different metro in your state. For instance, Florida drivers who live in Miami spend an average of 1.84% more of their income on car insurance than Orlando drivers. Car insurance alone may not be a sufficient reason to relocate, but if you’re already considering a move, you may want to consider the true cost of car insurance in each metro.

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The current and future state of auto insurance

Key factors may disrupt the auto insurance industry in 2022 and beyond. Broader shifts in the economy — like historic inflation increases, pandemic-induced supply chain disruptions, and international sanctions affecting gas prices — may have the most immediate effect on consumers’ wallets.

Inflation may continue to push premiums upwards

Prices of car repairs and replacements are higher than ever thanks to historically high inflation. And recently, several insurance companies have increased premiums by around 7% to keep ahead of inflation, according to the Wall Street Journal. Last month, the Federal Reserve increased the price of borrowing money by a quarter point and announced its intention to hike rates six more times in 2022. While this move could help reduce inflation by discouraging spending, the higher cost of borrowing could negatively impact consumers with car loans, mortgages and more. So what does inflation mean for your household’s budget?

Zachary Finn, Director of Risk Management at Henriott Group, told Bankrate that “every ingredient in the recipe for an auto claim is more expensive” amid high inflation. Ongoing supply chain issues mean car parts could be stuck on backorder for weeks, Finn says. Longer wait times for vehicle repairs could mean you’ll need a rental car for longer, at a time when “travel is experiencing a post-COVID pop.” According to Finn, elevated rental car demand and higher vehicle repair costs means higher insurance premiums.

But Finn emphasizes that consumers can take steps to protect their wallets. “One of the dials consumers can adjust to lower their premium is to look at a higher deductible,” Finn says. “A willingness to take a bigger bite of the loss is something insurance companies love to reward.” He says “Another dial consumers can adjust is to switch to an insurer that offers a pay per use/mile premium plan.” Finn is careful to note that this solution likely only works if you plan to drive less, but if your workplace gives you the option to work from home for a few days a week, a low-mileage insurance plan could save you money.