average cost of auto insurance

Wondering about the average cost of auto insurance? You’ve come to the right place!

Every state in the United States requires drivers to hold auto insurance. You will need auto insurance before you can register a vehicle in any state. Each government defines a certain level of minimum car insurance to hold.

Auto insurance premiums are paid for each month and they usually go up every year. The only way to stop paying for car insurance is to stop driving completely. Many states allow you to notify your Department of Motor Vehicles if you will no longer be driving. Then you can cancel your insurance without penalty. 

You are also allowed to cancel your insurance if you sell your vehicle and will no longer be driving.

No matter where you live or what you drive, car insurance is essential. Millions of drivers all over the U.S. go without insurance, but that means they are not protected in the event they get into an accident. The other driver in any accident can sue you to pay for bodily injury or property damage that they suffered. 

In fact, Bodily Injury Liability and Property Damage Liability are part of every car insurance policy.

But getting the best insurance policy for you can be a challenge. There is no one “best car insurance company” in every situation. Yes, a few national brands operate in almost every state, but that doesn’t mean you will get a car insurance premium you are really happy with.

In fact, average car insurance costs can vary by hundreds of dollars depending on where you live.

The Average Cost of Auto Insurance Is Different in Every State

Although every state requires auto insurance in some form, they are all different in how they do it.

Most states are “at fault” car insurance states. This means that claims are made against the insurance policy of the driver who is deemed at fault for a particular accident. If the driver does not have insurance, or does not have enough insurance to cover all liabilities, he or she risks being taken to court. 

A handful of states operate as “no fault” car insurance states. These states tend to have more expensive car insurance than their “at fault” peers, but this is not always the case. One reason why insurance may be costly in these states is the need to hold Personal Injury Protection (PIP), a special kind of insurance.

In these states, insurance policy holders go directly to their own insurance company with their claims for an accident. In particular, PIP insurance is helpful because it ensures drivers can get money for necessary medical treatment quickly. PIP can also replace a large portion of lost wages, potentially for years.

Even though most drivers in “no fault” states end up paying more, they are much less likely to be in a situation where they need to go to court. Many people consider that the worst case scenario, so there are those who greatly prefer living in a “no fault” state.

The Average Cost of Auto Insurance in America’s 50 States

Cost of Auto Insurance in America’s 50 States

1. The Most Expensive States

Although the cost of insurance policies change every year, Michigan stands out as the most expensive state for car insurance. Michigan has an unusual structure to its car insurance requirements and its personal injury benefits system is among the nation’s most permissive, motivating auto insurers to raise prices to protect their profits.

Louisiana, Texas, Florida, Georgia, Washington, D.C., Rhode Island, South Carolina, and Delaware are among the other locations that typically turn up as the most expensive places for car insurance. Population density, harsh weather, and a large number of uninsured drivers are among the key factors that fuel these high prices. 

Car insurance premiums cost anywhere from nearly $2,900 per year in Michigan to about $1,750 on average in Delaware. Many drivers in these states choose to save money by going with a minimum car insurance policy. That strategy can backfire if you get into an accident, however.

2. Tier 2 States 

These states are not the most expensive, but prices fluctuate and some of them may slip into the more pricey category from time to time. Average car insurance prices can range from over $1,700 per year in Colorado to nearly $1,500 in New Mexico. Rural areas in these states tend to see lower policy costs overall. 

States in this category include Colorado, Montana, Connecticut, Wyoming, Kentucky, Arkansas, Mississippi, Nevada, New Jersey, Arizona, and New Mexico.

3. Middle of the Road States 

There are some states that aren’t especially expensive or inexpensive when it comes to car insurance. These states may jockey with each other for different positions, but they rarely slip into one of the more expensive categories. The least expensive insurance in found in Nebraska, at an average of jut over $1,300 per year.

The other “Middle of the Road” states include Oklahoma, Maryland, Minnesota, West Virginia, Alabama, Illinois, Kansas, Washington, and South Dakota. With average annual costs nearing $1,470, Oklahoma is the most expensive, due in part to the spike in insurance claims that happens during tornado season each year.

4. Tier 4 States

As you get toward the less expensive states in the United States, you can find really good deals on car insurance! Pennsylvania and Virginia are tied for the lowest car insurance costs in Tier 4, both of them averaging just over $1,250 per year for a policy. 

North Carolina, Tennessee, Alaska, Oregon, New York, Utah, Hawaii, and Massachusetts are also found in this group. With average annual insurance costs over $1,350, North Carolina is the most expensive. Many states within this group have seen modest annual premium growth compared to their neighbors. 

5. The Least Expensive States 

When it comes to the lowest cost for car insurance, Maine frequently ranks at or near the bottom of all 50 states and the nation’s capital. Average monthly premiums are just over $900. Some other states within this exclusive club include New Hampshire, Ohio, Wisconsin, Idaho, and Iowa. 

Every state is different, so each one has its own combination of factors that help it keep car insurance costs down. On the whole, though, the least expensive states are united by the presence of more rural areas, mild weather, a high percentage of fully insured drivers on the road, and a lower number of severe car insurance claims, such as those arising from fatal car accidents.

Cheap Insurance Helps You Find the Best Car Insurance Deals Wherever You Are

Moving to a new state to save money on your car insurance probably isn’t an option. So, what can you do when you want to find the best car insurance deals in your area? Even if you live in a state known for its high car insurance premiums, Cheap Insurance gives you the tools you need. 

With Cheap Insurance, it’s never been easier to compare car insurance quotes online. When you look through accurate car insurance quotes from all the best insurers in your area, it’s much easier to get an affordable car insurance policy with the level of protection you really want. 

You can start right now or contact our team for more information.