Car Insurance Rates Have Surged, and Where You Live Matters

Does your state have the cheapest, or most expensive, car insurance rates?

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Between 2022 and 2023, car insurance rates increased by almost 14%, bringing the national average for full coverage car insurance from $1,1771 to $2,014. 

Despite this large increase, rates are expected to continue rising, well into 2023, even though on average, Americans are already paying almost 3% of their income on auto insurance alone. However, since car insurance rates vary from state to state, how much you’ll pay ultimately depends on where you live, for better or worse.

How much your car insurance costs is based on a number of factors, like your driving record, credit score and the model of vehicle being insured. Additionally, where you live has a big impact on your insurance rates. Auto insurance prices vary between states and are based on a number of factors, like the following.

  • Minimum coverage required: 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 in the area 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 new comparison tool — in partnership with Bankrate — will help you find the cheapest deals.

Car Insurance By State

According to Bankrate (opens in new tab), these are currently the cheapest, and most expensive, states for car insurance. It's hardly a surprise that the more sparsely populated states like Idaho, Maine and Vermont are the lowest for insurance, while the largely busy urban centers top the insurance table. 

Cheapest U.S. States for Car Insurance

  • Maine: $941 per year, 53% below national average
  • Vermont: $1,061 per year, 47% below national average
  • Idaho: $1,133 per year, 44% below national average
  • New Hampshire: $1,162 per year, 42% below national average
  • Massachusetts: $1,262 per year, 37% below national average

Most Expensive U.S. States for Car Insurance

  • Florida: $3,183 per year, 58% above national average
  • New York: $3,139 per year, 56% above national average
  • Louisiana: $2,909 per year, 44% above national average
  • Nevada: $2,779 per year, 38% above national average
  • Michigan: $2,691 per year, 34% above national average

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 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 and multiple policy discounts are some of the most common.
  • 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 on car insurance is by increasing your deductibles. 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.

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Erin Bendig
Personal Finance Writer

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.