The cost of auto insurance in the U.S. is on the rise, with auto insurance rates increasing by 26% since 2023, and there are no signs of slowing down. 

While the national average full-coverage auto insurance premium costs $1,776, there are things you can do to ensure you get the best possible insurance rate based on your individual rating factors. 

Key Takeaways

• Multiple rating factors impact the cost of auto insurance.
• The national average full-coverage auto insurance premium costs $296 monthly.
• Florida and Louisiana have the highest auto insurance rates. 
• Shopping for auto insurance rates can help you find the best premium.
• Insurance rates can vary widely from national average premiums. 

What is the Average Cost of Car Insurance in the U.S.?

The average full-coverage car insurance rate in the U.S. is $1,776. However, the actual cost of insurance can vary depending on where you live, how you drive, and other factors. Auto insurance premiums continue to climb, making it more important than ever for car owners to understand their options for getting the cheapest car insurance rate. 

Researching auto insurance companies' reputations as well as their premiums will ensure that a low premium isn't just bare-bones coverage with poor customer satisfaction and claims service. 

Getting a reasonable insurance premium and the service and personal attention you deserve is possible, but it takes some research and considering all of your options. 

How Much is Car Insurance Per Month?

Monthly car insurance premiums are typically between $84 for minimum coverage and $296 for full coverage, plus any applicable service charges. 

 The cost of auto insurance per month can vary between insurers and individuals based on rating factors. For example, teen drivers may see substantially higher premiums, while people with good driving records may see significantly lower premiums. 

Car insurance policies are usually semiannual (six-month) policies. However, most insurance companies offer monthly payment options to make it more convenient for their policyholders. Some insurers will charge a small monthly service charge to help cover the additional payment processing costs, but these costs are usually minimal and worth the added convenience of monthly payments.

Car Insurance Rates By State

Even individuals with similar rating criteria may find themselves with very different auto insurance premiums simply because of where they live. Louisiana and Florida rank highest for auto insurance costs, largely due to weather-related claims, while Wyoming, Vermont, and New Hampshire typically have the lowest car insurance rates. 

Cost Data Source: NerdWallet

State insurance regulations and mandates also impact the cost of auto insurance in each state. Insurers are limited in rating criteria, coverage minimums, mandated coverages, and the impacts of litigation. However, even moving across town can result in higher or lower insurance rates based on previous claims history in a specific zip code. 

What Affects Car Insurance Costs?

When looking for the best car insurance rates, it helps to know what affects car insurance costs. While you may not have control over some factors, you can significantly impact other premium rating areas over time. 

• Age: Young drivers tend to pay more, as they are less experienced and have a higher chance of getting into an accident. Senior drivers may also pay a higher premium based on age.
• Location: Your car insurance premium is impacted by your state or location, whether you live in an urban or rural area.
• Vehicle: Some vehicle types are more costly to repair or replace than others or have higher instances of theft or other claims, making them more expensive to insure. Generally, new cars will have higher car insurance rates because they are more costly to replace in a total loss. Rates may even differ between similar makes and models of Toyota versus a Honda.
• Driving Record: Speeding tickets, reckless driving, and DUIs all negatively impact car insurance premiums. Drivers with clean driving records will pay less for car insurance. 
• Credit: Poor credit often correlates to a greater risk of claims. Maintaining good credit will help with your auto insurance premiums. 
• Claims History: People who have had a previous at-fault accident or other claim are at a greater risk of having another claim. Claim-free drivers will experience lower premiums. 
• Marital Status: Married drivers are often seen as more stable and risk-averse than unmarried drivers, particularly younger drivers.  
• Driving Habits: Preferential rates are provided to drivers who maintain good driving habits and are willing to share their driving habits with their insurer through telematics.
• Mileage: Individuals who drive less are exposed to fewer claim opportunities than people who drive frequently.
• Gender: Many insurers consider male drivers to be more high-risk than female drivers. This is much more commonly applied to teen drivers than adults, and many states have banned gender as a rating criterion. 
• Coverage: The type of coverage and coverage limits you choose for your auto insurance will significantly impact the amount you pay. More coverage means more exposure to loss for the insurance company, resulting in more premiums. 

Maintaining a clean driving record and claims history and carefully monitoring your credit are just a few areas in which you can positively impact your car insurance premiums. Taking advantage of car insurance discount opportunities is another. The longer you maintain these rating criteria areas, the more impactful it will be on your auto insurance premiums.

How Coverage Affects Your Auto Insurance Rate

Maintaining minimal car insurance coverage on your autos can save you money on coverage costs in the short run, but it may leave you vulnerable to uncovered claims that can be more expensive than any savings you may have gotten through low premiums. 

Understanding minimal versus full coverage auto insurance can prevent cheap car insurance from turning out to be a not-so-great deal when the unexpected happens in life.

Minimal Auto Insurance 

Minimal or minimum car insurance coverage usually refers to liability insurance made up of bodily injury liability and property damage liability. It may also include medical payments, personal injury protection, uninsured motorist coverage, or other incidental coverages, but does not include collision and comprehensive coverage. 

Minimal coverage often has state minimum or insurer minimum coverage limits. Minimal coverage may be sufficient for someone with an older, paid-for vehicle who is not worried about not being compensated for potential vehicle damage. 

Though minimal coverage may comply with state mandates and provide more affordable car insurance premiums, any liability claim amounts exceeding your coverage limit will still be your responsibility. 

Understanding your coverage options and what you are getting for your money can help you determine if what appears to be a good deal is also the best protection for you.

Full Coverage Auto Insurance 

Full coverage auto insurance will be more expensive than minimal coverage. It typically covers everything mentioned in minimal coverage, along with comprehensive and collision coverages to repair or replace your car in the event of a claim. 

The deductibles you choose for comprehensive and collision, along with your coverage limits for other coverages, will impact the cost of your full coverage policy. Your insurance agent can go over your options and assets at risk to determine the best coverage and value for your auto insurance. 

Car Insurance Costs by Insurer

Car insurance prices vary not only by individual, vehicle, and state but also by insurer. Shopping car insurance companies and comparing similar coverages can help you ensure you get the best possible car insurance rate. 

Cost Data Source: NerdWallet

When comparing car insurance quotes to get the best rate, make sure you also consider non-premium factors like financial stability. Independent rating agencies can help ensure that your insurer will be there when a claim arises, whether it only impacts you or many people, such as in a catastrophic event. Well-known ratings agencies include A.M. Best, Moody’s, and Standard & Poors. 

Customer satisfaction is also an important non-premium metric. The Better Business Bureau provides customer satisfaction ratings for auto insurance companies. 

Remember that satisfied customers are much less likely to provide feedback than unsatisfied ones, so look at the bigger picture when assessing an insurance provider’s customer satisfaction scores.  

How to Get a Lower Car Insurance Rate

With so many rating factors out of your control, finding a great auto insurance rate can be frustrating. However, there are many things you can do to help you get a lower rate and to continue to impact your auto insurance rates well into the future. 

Tips for getting and maintaining a lower car insurance rate:

• Pay-in-full. This is the simplest way to save a little on your auto insurance. Many companies charge a service fee for paying monthly or quarterly. Paying your auto insurance policy in full can save a few valuable premium dollars. 
• Compare auto insurance companies. Check rates of multiple insurers. Insurance companies have varying rating factors, base rates, and discount opportunities. Shopping around will help you choose the right insurer with confidence.
• Bundle your home and auto insurance. Significant discounts can be available for having both your homeowners or renters insurance and auto insurance with the same company. When comparing rates, look at your total insurance portfolio. One company may have higher auto insurance rates but much lower home insurance rates. When considered together, your overall insurance costs may be lower. 
• Take a defensive driving course. A defensive driving course is a great refresher and could save you money on your auto insurance. Make sure the course you choose is approved by your insurer.
• Ask about association discounts. Some insurers offer discounts for those who belong to various associations or based on profession. Professional discounts may apply to teachers, first responders, or military members. These discounts may not be widely advertised, so be sure to ask.
• Improve your credit score. The better your credit score, the better your premium. Poor credit scores will negatively impact your auto insurance premiums unless it improves. Good credit scores will reap continued financial rewards through lower insurance premiums.
• Keep a clean driving record. Good driving discounts for maintaining a clean driving history without any tickets or other violations can provide great auto insurance savings.
• Remain claim-free. Claim-free discounts are another way to keep your auto insurance rates low. 
• Check into student discounts. Good student, driver training, safe driving courses, and student away at school are all potential discounts for teen or college student drivers. 
• Review your coverages. Your auto insurance needs can change over time, so look for areas of savings. 
• Consider usage-based discounts. Usage-based discounts use an app or plug-in device to monitor driving habits that are reported back to your insurer for a more accurate premium rating. Dashboards provide driving feedback for improvement over time. 

Scheduling periodic reviews of your insurance portfolio with your insurance agent can reveal additional areas of savings, as well as help discover any coverage gaps that may leave you at risk. Insurance reviews are often scheduled annually, biannually, or whenever new life events occur. 

While your insurance rate will not change mid-policy term, you do not have to wait until your renewal to change insurance companies if you find a better rate elsewhere. Any prepaid premiums will be prorated, and unused premiums will be refunded to you. It is crucial to ensure no time gap between one insurer and the next to prevent state fines, lender-force-placed insurance, or uncovered claims. 

FAQ: How Much is Car Insurance?

Is $500 a lot for car insurance?

Whether your car insurance is $500 every six months or $500 per month, many factors impact insurance rates,  and what may be a lot for one person could be a reasonable rate for another individual based on their unique car insurance rating factors.

The best way to determine if any auto insurance rate is the best for you is to get multiple quotes and utilize all available discounts. Even if you aren’t happy with the rate you can currently qualify for, taking steps now to improve your insurance rating criteria can help your future insurance rates improve over time. Even the worst driving record can become great with enough time and attention to driving habits. 

How much is car insurance on average in the U.S.? 

The average cost of car insurance in 2024 is $1,776 for full coverage and $501 for minimal coverage, although that amount can be very different from state to state and person to person. 

Comparing rates with various insurers can help you determine if you are receiving the best rate based on where you live, how you drive, and your personal demographics. Remember to check rates often as circumstances and rates change. 

Did car insurance go up in 2024?

Like the cost of most other things, car insurance did go up in 2024, with the average rate of full coverage car insurance in the U.S. increasing by 26%. Increases in population, inflation, changes to state insurance mandates, and a history of large, destructive weather events, in addition to individual rating factors, all impacted insurance rates in 2024. 

Why is my car insurance higher than the national average?

Your insurance rate may be higher than the national average for many reasons, including where you live, labor cost, driving history, and credit score. 

National averages are just a snapshot of the entire auto insurance industry. Insurance premiums can change every six months based on your individual circumstances. Any changes in your insurance rates between insurance policy renewals will result from changes you requested and not a change in overall rates. 

Can I lower my insurance premium if I drive less?

If your average annual mileage changes due to a change in driving habits, check with your insurer to see if there is a reduced rate for mileage. Most insurers now offer a discount for participating in a telematics program to get the most accurate rating according to your specific mileage usage.

Telematics programs monitor driving habits, including mileage, through an app or plug-in device. This personalized approach to car insurance allows you some control over your insurance premium through your driving habits. Dashboards on telematics apps provide near real-time information to help you improve your driving habits over time.

What is the most expensive car to insure?

Generally, the more expensive the vehicle is to purchase, the more it costs to insure it. Certain vehicle types, like luxury vehicles and sports cars, are typically more expensive to insure.

Luxury vehicles are not only more costly to replace in the event of a total loss, but replacement parts can be harder to come by and cost much more. They may also require more specialized repair facilities. Sports cars lend themselves to riskier driving habits and more costly repair costs than other vehicles. 

The car itself is only one part of the insurance equation. A sports car with a 17-year-old behind the wheel will cost much more to insure than a 48-year-old driver with a long-standing clean driving record and multiple types of insurance. Getting insurance quotes on a car before purchasing it is always a good idea to prevent buyer's remorse later. 

Article written by Shawnette Good. 

Shawnette is an insurance professional with 30 years of industry experience helping consumers understand complex insurance topics. Outside of writing, Shawnette enjoys long nature walks and volunteering in her community.