Rachael Green
Car insurance rate hikes have shown no sign of slowing down. In Bankrate's study, it found that car insurance rates increased by $625 annually on average, from January 2023 to January 2025. That represents a premium increase of more than 30% over the last couple of years.
Car insurance rates are based on several factors, like your driving record, credit score and age. Even your car model can impact your premium. But location also has a big impact on what you pay. Car insurance rates vary from state to state, so how much you’ll pay ultimately depends on where you live, for better or worse.
While uprooting your life to a new state to save on car insurance probably isn't worth it, it helps to know how the place you live is impacting your everyday costs, like car insurance.
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So, which states have incurred the highest car insurance increases? Price differences between states are based on several factors, like the following.
- Minimum coverage required: There are several types of car insurance, and some states mandate that your auto insurance policy have more coverage than others. In some states, you’ll only need liability coverage, but others require extra coverage such as uninsured motorist coverage and/or personal injury coverage, which can make your policy more expensive.
- The number of claims from accidents or weather-related incidents: Typically, the more claims that are made in an area, the more expensive your insurance policy will be.
- Population or traffic density: The more people in an area, the more likelihood of accidents, which brings your rates up.
- Cost of living: The cost of vehicle repair and labor in your state can also affect how much your insurance rate is going to be.
If you're looking for auto insurance, our comparison tool — in partnership with Bankrate — will help you find the cheapest deals.
Eight States Where Car Insurance Rates Are Rising Fastest
Nationwide, the average car insurance premium rose by 12% from 2024 to 2025, according to Bankrate. But these eight states saw even higher car insurance rate increases in 2025:
- North Carolina: 25% increase. While the state enjoys relatively mild weather and a low cost of living that helps keep overall rates below the national average, premiums are rising fast here as a result of rising repair costs and an uptick in traffic violations.
- Washington: 25% increase. A low population density and a low rate of fatal car accidents in the state have made car insurance rates in Washington lower than the national average. Still, the rising cost of repairs and an increase in vehicle thefts have driven a major rate increase.
- Colorado: 25% increase. Poor road conditions and an above-average number of uninsured motorists have already made Colorado one of the most expensive states to get car insurance in. But a growing population and an uptick in car thefts have pushed those high rates even higher this year.
- Florida: 23% increase. Florida is one of the states with the most uninsured drivers on the road, a high risk of hurricane-related damage and also holds the dubious distinction of having some of the highest rates of fatal crashes. These and other unique challenges have made the state one of the most expensive states for home insurance and car insurance alike.
- Minnesota: 20% increase. According to the study, weather might be the key driver behind soaring rates here. Intensifying hailstorms are leading to a spike in hail damage insurance claims.
- Arkansas: 18% increase. A low population density has allowed Arkansan drivers to enjoy below-average car insurance rates. But intensifying natural disasters like flooding and summer storms have driven premiums higher here.
- New Jersey: 18% increase. With a high population that's densely concentrated in a few urban hubs, traffic congestion and accident risk are leading factors behind New Jersey's above-average car insurance premiums. The recent spike in rates is likely driven by rising repair costs and recent changes to minimum coverage requirements.
- California: 17% increase. In California, the premium increase this year was largely due to an increase in minimum coverage requirements. Liability coverage requirements doubled for bodily injury and tripled for property damage starting at the beginning of 2025.
How to save on car insurance costs
- Shop around: Since different car insurance companies calculate rates differently, it’s important to shop around for the best deal. Requesting quotes from various companies can help you choose the cheapest option available to you at your desired level of coverage. Plus, comparing quotes and switching your car insurance can also give you insight into whether or not you’re overpaying for your current coverage.
- Take advantage of insurance discounts: To save on auto insurance, be sure to take advantage of additional discounts offered by your insurance company that can help you save on your rate. Safe driving discounts, good student discounts, military and multiple policy discounts are some of the most common.
- Notify insurance of driving changes: If you retired or took a job working from home and don't drive as often, you might qualify for a low-mileage discount.
- Improve your credit: Since many car insurance companies use your credit score as a way to determine your rates (with a few states as exceptions), having a high credit score can help you save.
- Increase your deductibles: Another way to save is by increasing your car insurance deductible. Just make sure you keep them at an affordable amount, in case you get in an accident and have to pay. Since your out-of-pocket expense goes up in the case of an accident, your premium will therefore be lower.
Will car insurance rates continue to increase?
It depends on many factors. Some states didn't see spikes in car insurance premiums. Missouri's rates dropped by 11% in 2024, while Pennsylvania drivers received an average discount of 0.3%.
One factor to watch moving forward is the weather. If you live in an area prone to inclement events, that risk alone could keep costs high.
For example, Minnesota drivers paid 20% more for insurance in large part because of severe storms the previous year. Hail damage from those storms resulted in over a billion dollars in damage, according to Bankrate.
The bottom line on states with the highest car insurance increases
Insurance costs continue to climb in many areas of the country. There are many reasons for this, from wildfires to flooding to hailstorms and vehicle theft rings.
If you receive a renewal letter with a higher rate, shopping around is essential. It can help you ballpark how much your rate should be, and in some cases, help you save money.
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