What Determines the Average Cost of Auto Insurance

UPDATED: NOVEMBER 04, 2022 | 2 MIN READ

When you’re looking to insure your car, you want to know that you’re getting the best deal. To know this, you’ll probably look at the average cost of insurance and try to make sure you’re being offered rates on the lower end. But, knowing the average cost of auto insurance can be a little tricky.

Average Cost of Auto Insurance Quicklinks

• What Determines the Average Cost of Auto Insurance
• What’s the Average Cost of Auto Insurance by Category?
• Average annual cost of car insurance by age
• Average car insurance cost by violation
• Average car insurance cost by company
• What’s the Average Cost of Auto Insurance by State?
• Most expensive average insurance
• Least expensive average car insurance
• Car Insurance Rate FAQs
• How much does car insurance cost for a beginner?
• Does your car insurance premium go down if your car is paid off?
• Does it cost more to insure a red car?
• What’s the average car insurance cost for a teen driver?
• How does my age affect my car insurance rates?
• Finding Good Car Insurance Rates

What Determines the Average Cost of Auto Insurance

The average cost of auto insurance varies depending on a wide number of factors.

These include:

• Age: Drivers on either end of the age spectrum are typically charged higher premiums.
• Gender: 48% of Americans think auto insurers charge men more for coverage than women, but it depends on the insurance company regarding how they think gender impacts risk.
• Location: The average cost of car insurance varies by state and city inside the state.
• Insurance provider: All things being equal, different providers may offer different rates. Some can offer discounts, whereas others may determine you to be a higher risk.
• Driving history: The cleaner your driving record, the lower your premiums will likely be.
• Credit score: Not all states allow insurers to look at credit scores, but in the ones that do, insurance companies may consider lower scores to be higher risk and raise the premiums accordingly.

What’s the Average Cost of Auto Insurance by Category?

There are certain categories that insurance companies take into consideration when offering rates. 

The average annual cost of car insurance by age

	Male	Female	Difference	Percent Difference Between Rates
18-year-old	$5,646	$4,839	$807	-14%
25-year-old	$2,181	$2,036	$145	-7%
40-year-old	$1,648	$1,701	$53	3%
60-year-old	$1,552	$1,537	$15	-1%

Average car insurance cost by violation

Violation	Premium Increase After Violation (%)	Average Annual Premium
Running a Red Light	0.23	$879
Speeding Ticket	0.26	$904
Open Container Violation	0.44	$1,028
At-Fault Accident	0.49	$1,064
Reckless Driving	0.91	$1,366
Driving with a Suspended License	1.01	$1,441
DUI	1.05	$1,434

Average car insurance cost by the company

Each car insurance provider has its criteria for determining car insurance premiums. Insurance companies may often agree, like how teenagers typically pay more for car insurance across the board. 

Other times, like in the case of gender, there does not seem to be a consensus. Different companies use different criteria, which may be reflected in the differences in rates offered to the same person. Shop around and compare various companies to get cheap car insurance rates.

What’s the Average Cost of Auto Insurance by State?

According to data from the Insurance Information Institute, the average cost to insure a car across the United States was $1,070.47 in 2019. This increased from $1,059.41 the year before and is likely to have increased further through 2022.

State	Average expenditure ($)	Rank
Alabama	932.14	29
Alaska	991.09	21
Arizona	1,063.93	18
Arkansas	897.92	32
California	1,051.79	19
Colorado	1,174.87	14
Connecticut	1,237.55	11
Delaware	1,289.93	9
D.C.	1,440.58	4
Florida	1,414.17	5
Georgia	1,259.49	10
Hawaii	839.87	37
Idaho	738.1	48
Illinois	939.64	26
Indiana	777.05	43
Iowa	714.86	49
Kansas	818.99	39
Kentucky	935.61	27
Louisiana	1,557.22	1
Maine	696.37	51
Maryland	1,236.61	12
Massachusetts	1,182.69	13
Michigan	1,495.94	2
Minnesota	892.17	33
Mississippi	975.58	23
Missouri	929.91	30
Montana	834.86	38
Nebraska	807.3	40
Nevada	1,292.52	8
New Hampshire	864.35	34
New Jersey	1,395.53	6
New Mexico	932.67	28
New York	1,445.30	3
North Carolina	741.7	47
North Dakota	703.73	50
Ohio	802.72	41
Oklahoma	908.95	31
Oregon	990	22
Pennsylvania	992.33	20
Rhode Island	1,382.64	7
South Carolina	1,114.90	16
South Dakota	745.33	46
Tennessee	863.39	35
Texas	1,143.85	15
Utah	954.14	24
Vermont	785.37	42
Virginia	861.18	36
Washington	1,066.84	17
West Virginia	946.03	25
Wisconsin	767.42	45
Wyoming	776.22	44
United States	$1,070.47
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Most expensive average insurance

Looking at the latest data available from the National Association of Insurance Commissioners, the top ten most expensive states in 2019 were:

Rank	Most Expensive States	Average Expenditure ($)
1	Louisiana	1,557.22
2	Michigan	1,495.94
3	New York	1,445.30
4	District of Columbia	1,440.58
5	Florida	1,414.17
6	New Jersey	1,395.53
7	Rhode Island	1,382.64
8	Nevada	1,292.52
9	Delaware	1,289.93
10	Georgia	1,259.49

Least expensive average car insurance rates

Looking at the latest data available from the National Association of Insurance Commissioners, the top ten least expensive states in 2019 were:

Rank	Least Expensive States	Average Expenditure ($)
1	Maine	696.37
2	North Dakota	703.73
3	Iowa	714.86
4	Idaho	738.1
5	North Carolina	741.7
6	South Dakota	745.33
7	Wisconsin	767.42
8	Wyoming	776.22
9	Indiana	777.05
10	Vermont	785.37

Car Insurance Rate FAQs

How much does car insurance cost for a beginner? 

This depends on how old the beginner driver is. Teenagers will have higher premiums than new drivers over the age of 25. It also depends on what kind of coverage you’re looking for. Compare providers to find the best value coverage for your situation.

Does your car insurance premium go down if your car is paid off?

Paying off your car loans doesn’t directly affect your car insurance rates. However, it can improve your credit score. Better credit scores allow insurance providers to recalculate your risk level, leading to lower car insurance premiums. 

Also, once your car loan is paid off, you can lower your insurance coverage to liability only, lowering your rates. Remember that liability-only insurance does mean repair and replacement to your car aren’t covered if you have a loss.

Does it cost more to insure a red car?

No. This is a common misconception that has been circulating for many years. Unless it’s a fancy custom color that could be considered an extra modification to the car, it doesn’t matter what color car you drive. It won’t impact your insurance rates.

What’s the average car insurance cost for a teen driver?

According to the Centers for Disease Control and Prevention (CDC), teens are more likely than older drivers to underestimate or not be able to recognize dangerous situations.

The average monthly premium can range from around $300 to as high as over $700 more to insure your teen. Adding a teen to your existing policy can increase the average household’s car insurance bill by 152%.

How does my age affect my car insurance rates?

Usually, the younger you’re the higher your rates will be, with insurance rates settling around age 25. Drivers over the age of 80 will see their premiums increase again.

Finding Good Car Insurance Rates

The average cost of car insurance varies dramatically depending on many factors. Knowing if you’re getting a good deal on your insurance policy can be complicated, so you must shop around to ensure you’re getting the most affordable insurance available.