Average Cost of Car Insurance In The US

Risk is an inherent part of our everyday lives. Insurance cannot reduce it, but it can mitigate many of its effects, especially when talking about material damages. The car industry has always had a high demand for insurance.

In 2022 alone, there were almost 7.4 million crashes involving property damage in the US alone and 2.38 million injuries. This highlights just how important car insurance is.

What Is The Average Cost of Car Insurance In the US for 2024?

Car insurance costs tend to vary by the hundreds, sometimes even thousands of dollars and usually depend on the unique circumstances relevant to each insurance policy. That’s why it is always advisable to compare the available rates and find the insurance companies that best suit your needs.

Sometimes your location can affect the cost of an insurance policy for your car. Take, for instance, how the cost of insurance in California differs from rates in Arizona or New Jersey.

Other times, your occupational status can determine the insurance costs. For example, if you’re a college student, you are statistically more prone to causing accidents, so your insurance premiums will be higher. 

With that said, the average cost of car insurance in the US stands at $2,543 per year for full coverage. As we mentioned before, the costs are heavily determined by a range of factors from the driver’s age and location to past driving records, the age of the vehicle etc. Individual quotes differ by insurance provider too, so the overall results vary greatly.

Another factor you should consider is how comfortable you are with your vehicle coverage and what you can afford to pay for car insurance. Some individuals may own older or unfinanced vehicles and may therefore feel comfortable with just having the minimum insurance coverage stipulated by their state of residence. 

The average minimum auto insurance rate (minimum-coverage auto insurance) for drivers in the United States currently stands at $678 per year. 

The average monthly car insurance for full coverage in the United States works out to about $158 per month, while the bare minimum will set you back around $56.

Should You Opt For Minimum or Full Coverage?

While many people are comfortable getting the most basic coverage available, experts instead recommend that you opt for full coverage if you can. The reason is that it offers much better financial protection when it comes to making a claim.

Of course, you may never need to make a claim on your insurance policy in the first place. If there are no accidents, and that might look like unnecessary money. However, it could also happen, and it’s frankly much better to be prepared if you can afford it.

Here are some key facts about average auto insurance rates:

• Just in 2024 alone, car insurance rates in the US have risen 25% compared to the year before.
• Crashes involving motor vehicles in the US cost around $340 billion per year.
• Average rates get more expensive the younger the driver is. For example, an average 18-year old male pays $6,851 in 2024, while a 20-year old pays $5,235.
• The price is significantly influenced by existing traffic offences. For instance, driving under the influence of alcohol (DUI) increases annual premiums by around $2,198. Speeding tickets increase average premium prices by $203 over a three-year period, and previous at-fault incidents bump up average premiums by another 10%.

Car Insurance Rates by State

Having established that numerous factors influence the prices of car insurance premiums, it is little surprise that these can vary a great deal. Another factor that affects prices is the state and city you are getting insured in.

As of December 2024, Florida has the most expensive average car insurance rates at $4,088 per year, followed by New York with $3,846 and Louisiana with $3,744 per year.

States like Idaho, Vermont, and Ohio had the lowest premiums at $1,370, $1,412 and $1,533 per year, respectively. 

Differences in average costs in these states can be attributed to certain factors, such as no-fault car insurance policies, which drive up the rate of claims.

There are also factors such as natural disasters occurring in the state or the percentage of uninsured drivers.

Unfortunately, the average economic situation in each state plays all too little of a factor, with people in poorer states like Louisiana and Florida still having to contend with higher-than-average premiums for car insurance.

Other Factors Determining Car Insurance Rates

Auto insurance companies consider several factors when they need to determine individual costs of car insurance. The average costs can be affected by everything we’ve already mentioned, including local regulatory requirements, type of vehicle, driver’s age, traffic records, and gender.

In addition to those requirements, the following factors might also be considered:

Credit Rating

We already know that a bad credit score will keep you from accessing many good things in life. A poor credit score indicates that a driver will file more claims than a driver with better credit. In essence, a better credit score will likely give you lower premiums on your car insurance. 

It’s not all doom and gloom, though. Where a driver ranks on the insurance credit tier is still determined differently by auto insurers in different states. Some, such as those in Michigan, Massachusetts, Washington, Hawaii and California, do not consider credit scores when determining automobile insurance rates. 

Selections on Coverage

The coverage options you choose on your car insurance policy can significantly influence the rates you have to pay. For instance, if the coverage selections you have on your policy include lower deductibles, higher liability limits, or let you take advantage of optional coverages, then you will almost certainly have to pay higher premium rates.

How to Save Money on Car Insurance

As essential as car insurance is, you don’t always have to pay premium bucks to get a good plan. Many providers give discounts that lower the amount you have to spend on insurance premiums. Just how much is taken off is dependent on the particular provider. Before signing a policy, it would be prudent to ask your insurance agent how many money-saving options are available.

Some of the standard discounts you may get are:

• Discounts for good students: many companies give discounts to students with good academic records. As a student, you should also look out for student-friendly insurance companies when choosing your next car insurer.
• Claim-free: if you’re a driver with no claims on record in several years, you are usually eligible for savings on your next policy.
• Full premium payment: paying premiums in full can help reduce the average policy costs.
• Insurance policy bundling: when you bundle more than one policy together, such as a home insurance policy with auto insurance, you may be able to get a discount on either or even both of them.

As always, what discounts you may get or are eligible for differ depending on the insurance provider you opt to cast your lot with. That’s why it’s always important to speak with multiple representatives first, so you are open to as many opportunities as possible.

Finding a cheap insurance plan with a trusted provider is not easy, but it’s worth putting in the extra effort for a policy you’ll be satisfied with.