The true cost of auto insurance in 2023
The true cost of car insurance is the percentage of average household income spent on an annual full coverage car insurance policy. Nationally, full coverage car insurance costs an average of $2,014 per year. The national average annual income is $68,852, according to data from the U.S. Census Bureau. This means that, nationally, drivers spend an average of 2.93 percent of their income on car insurance in 2023. This is up from 2.57 percent in 2022, which is no surprise, given the rapid inflation the country experienced last year.
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AVERAGE ANNUAL PREMIUM$2,014
for full coverage insurance
PERCENT OF INCOME SPENT2.93%
on full coverage insurance
HIGHEST TRUE COSTNew York
highest percentage of income spent on car insurance
LOWEST TRUE COSTMaine
lowest percentage of income spent on car insurance
The true cost of auto insurance in 2023 by state
|State||True Cost ranking||Average annual premium||Premium change vs. 2022|
2022 vs. 2023
#1Your driving record
#2Your credit score
#3Adding a teen driver
#4What vehicle you choose
|Diving incident||Average annual premium||% of income spent|
|Clean driving record||$2,014||2.93%|
|Lapse in coverage||$2,213||3.21%|
Your driving record
- Hawaii drivers have the smallest surcharge in premium after a speeding ticket conviction, only paying an average of $126 more per year.
- Drivers in California pay the highest added cost after a single at-fault accident, with the average full coverage rate increasing $1,498 per year to an average of $3,798.
- After a DUI conviction, Michigan drivers see an average premium increase of 173 percent, the highest in the nation, with full coverage rates jumping from $2,691 to $7,337 per year.
Your credit score
- Wisconsin drivers have the highest premium increase when facing a drop from good credit to poor credit, with a premium hike of $4,339 more per year.
- New York drivers with poor credit pay an average premium of $7,186, the highest in the nation.
- Washington drivers only pay an average of $58 more per year when their credit drops from good to poor. However, this low number is likely due to Washington previously having a temporary ban on credit as a rating factor that was overturned in 2022.
Adding a teen driver
- New York has both the highest average premium after getting married and adding a teen driver ($6,808) and the highest average increase ($3,669 increase versus the state average).
- Drivers in Miami and Tampa have the highest increases for getting married and adding a teen driver among metro area data we studied, with added costs of $3,754 and $3,549 respectively.
What vehicle you choose
#1Rates will likely keep rising in 2023
#2You may need higher coverage limits
#3There might be more electric vehicles on the road
#4What do these trends mean for me?