What factors influence car insurance costs?

Car insurance costs are influenced by several factors, including your driving record, credit score, and the model of vehicle being insured. Additionally, factors such as state requirements, the number of claims in the area, population or traffic density, and the cost of living can impact insurance rates.

Which states have the cheapest car insurance rates?

According to Bankrate, the cheapest states for car insurance include Maine, Vermont, Idaho, New Hampshire, and Massachusetts. These states have insurance rates ranging from 37% to 53% below the national average.

Which states have the most expensive car insurance rates?

Bankrate reports that the most expensive states for car insurance are Florida, New York, Louisiana, Nevada, and Michigan. These states have insurance rates ranging from 34% to 58% above the national average.

How can I save on car insurance costs?

To save on car insurance, consider shopping around for the best deal by requesting quotes from different insurance companies. Take advantage of insurance discounts offered by your provider, such as safe driving discounts, good student discounts, and multiple policy discounts. Improving your credit score can also help lower your rates. Increasing your deductibles may lead to lower premiums, but ensure they remain at an affordable amount in case of an accident.

Car Insurance Rates Have Surged, and Where You Live Matters

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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 $1,771 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.

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Car Insurance By State

According to Bankrate, 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.