On average how much is car insurance a month
En Español: Las tarifas de seguro automotor por estado
Michigan comes out on top for the third year in a row in a contest that no state wants to win: the most expensive car insurance rates in the nation. Insure.com’s 2016 state-by-state comparison of auto insurance premiums found that the Great Lakes State is still the most expensive state in the country to insure a car.
Michigan has been in the No. 1 or No. 2 spot for the six years that Insure.com has commissioned the annual report. Montana captured the No. 2 spot for the second year in a row. New Jersey broke into the top five for the first time ever, Louisiana was No. 4, and Oklahoma rounded out the top five.
On the flipside of the cost coin, Maine grabbed the No. 1 spot for the cheapest car insurance in the country. Maine has been in the top three for the least expensive car insurance for all six years of the study. This year, Ohio came in No. 2, Wisconsin was three, Idaho took fourth, and New Hampshire earned No. 5.
Use the interactive map below and hover over any state to display the average annual rate, comparison to national average, and the percent of change from last year.
This year’s best-selling vehicles
The annual study compiles rates from six large insurance carriers in 10 ZIP codes in every state. Rates were for the same full-coverage policy for the same driver -- a 40-year-old man with a clean driving record and good credit.
The rates are an average for the 20 best-selling vehicles in the U.S. in order to present more accurate rates for the average driver – without high-end sports or luxury cars skewing the data. Each model was rated on its cheapest-to-insure trim level. This year’s 20 best-selling vehicles list included:
- Ford F-150 XL SFE
- Ford Fusion S
- Ford Escape S
- Ford Explorer XLT
- Chevrolet Silverado 1500 LT
- Chevrolet Malibu LS
- Dodge Ram 1500 Tradesman
- Toyota Camry LE
- Toyota Corolla L
- Toyota RAV4 LE
- Honda Civic LX
- Honda Accord LX
- Honda CR-V LX
- Chevrolet Equinox LS
- Nissan Altima 2.5 S
- Nissan Rogue S
- Nissan Sentra S
- Hyundai Sonata SE
- GMC Sierra 1500
- Jeep Cherokee Sport
The national average for a full-coverage policy as featured in the Insure.com report came in at $1,325 this year – a slight increase from last year’s average of $1,311. Rates varied from a low of $808 a year in Maine to a budget-busting $2,738 in Michigan. Insurance rates in Michigan are more than double (107 percent) the national average.
Insurance rates are influenced by a number of different factors. Everything from traffic, crime rates, state and local laws, the percentage of uninsured drivers, as well as the number of car insurance companies competing in a market can all result in higher, or if you’re lucky, lower insurance premiums in your state.
States with highest car insurance
The reasons behind the highest state rates include everything from Personal Injury Protection (PIP) coverage (a big factor in two of the states) to high fatality rates and litigious-minded drivers.
Here are the top three most expensive states for car insurance and why they are so expensive:
#1 Michigan -- Michigan’s no-fault insurance structure is largely responsible for the high cost of car insurance in the state.
“Michigan auto consumers pay more than most states for car insurance due to the state’s high medical mandate. Michigan is the only state in the country that requires auto consumers to purchase unlimited, lifetime medical benefits as part of the auto insurance policy,” explains Lori Conarton with the Insurance Institute of Michigan.
“Unfortunately, it’s Michigan’s auto insurance consumers who pay the price for this unique auto insurance law,” continues Conarton.
Michigan, like most other no-fault states, requires its drivers to buy personal PIP insurance. PIP coverage will pay the medical bills of the policyholder as well as any passengers and family members that are in the vehicle at the time of the accident.
The big difference is in the amount of PIP coverage that Michigan requires of its drivers. Florida, for example, only requires drivers to carry $10,000 in PIP coverage, while Michigan’s no-fault policies must offer unlimited medical benefits, which pushes the price up dramatically.
Michigan requires insurers to cover medical claims up to $530,000. The nonprofit Michigan Catastrophic Claim Association (MCCA) covers damages above that amount. In addition to high insurance premiums, Michigan drivers must pay an annual assessment to the MCCA, which in 2016 is $150.
The high cost of car insurance pushes many drivers out of the market. According to the Insurance Information Institute (III), an estimated 21 percent of Michigan drivers were uninsured in 2012. High numbers of uninsured drivers raise rates because there are fewer drivers (and their premiums) to share the risk pool.
The high cost also leads to – while technically legal – unscrupulous behavior. Some Michigan drivers will purchase a seven-day policy (which insurers in Michigan sell) so they have proof of insurance when registering their vehicle and then let the policy expire after a week, leaving them uninsured.
Unfortunately, rates are probably not coming down anytime soon. Until the PIP requirement is changed or ditched altogether, insurance rates will remain high in Michigan.
#2 Montana -- Montana stayed in the No. 2 spot for the second year in a row with an average premium of $2,297, which is 73 percent higher than the national average and a whopping $411 increase over last year’s Insure.com Montana average.
There are a number of factors that increase rates in Big Sky country, but one of the biggest is the accident rate. Wide-open spaces and lonely roads lead to a lot of car accidents and fatalities. According to the Insurance Institute for Highway Safety, Montana has the highest vehicle accident fatality rate in the country with 22.6 deaths per 100,000 people – twice the national average.
#3 New Jersey --The Garden State makes the top five for the first time. The average premium in New Jersey came in at $1,905, which is 44 percent higher than the national average.
According to Kacy Campion Renna, vice president of the Professional Insurance Agents of New Jersey, high accident rates may have something to do with New Jersey’s costly insurance. “New Jersey ranks No. 1 when it comes to population density, which means there’s a greater chance of having an auto incident here.”
Renna also cites other factors that can impact rates in New Jersey. “Other factors to consider are high medical costs, high rates of auto and medical fraud combined with the fact that the New Jersey residents tend to be pretty litigious.”
Fraud has become a fact in New Jersey’s PIP coverage. New Jersey allows PIP coverage levels up to $250,000, which is the second highest in the country, behind Michigan. Unfortunately, PIP fraud has shot up which raises the cost of insurance for everyone in the state.
States with the cheapest car insurance
The low cost of car insurance in the least expensive insurance premium states can be attributed to a number of factors, including fierce insurer competition and low numbers of uninsured drivers.
#49 Wisconsin – The Badger State is No. 3 when it comes to inexpensive insurance. A yearly premium of $912 makes car insurance a bargain in Wisconsin. Wisconsin benefits from a pretty rural environment and a very competitive insurance market. A lack of major cities helps keep accident rates down.
According to numbers from Highway Loss Data Institute (HLDI), Wisconsin has 1 death per 100 million vehicle miles traveled in 2013. Montana, the second-most expensive state on the list, recorded 1.96, which was the highest on the list in the same year.
In addition, Wisconsin residents are not particularly litigious, which makes insurance companies happy and leads to lower rates across the state.
#50 Ohio – With an average annual premium of $899, Ohio is No. 2 for affordable car insurance for the second year in a row, and the state has spent quite a bit of time in the top five over the last six years.
“Ohio is home to many national and regional insurers because of its stable legal and regulatory environment. This creates a competitive marketplace for consumers, leading to great rates and a variety of products and services from which to choose,” explains Perk Reichley, President of Reichley Insurance Agency.
According to the Ohio Insurance Institute, there are currently more than 650 insurance carriers writing policies in the state. Compare that number to the approximately 134 in California and just over 40 in New Jersey, and it’s plain to see how competition has positively affected the rates.
#51 Maine – Maine has hit the No. 1 spot for two years running, and it’s finished in the top three every year of the Insure.com study. The average premium came in at $807 per year, which was a tiny $2 increase over last year.
Maine is a convergence of favorable factors; they have very few large urban areas so traffic is usually not a problem, which in turn keeps down accident rates. In addition, though Maine gets a lot of snow, the state doesn’t usually suffer from major weather incidents like tornadoes and hailstorms, which can do serious and expensive damage to a car.
Maine drivers take their insurance responsibility seriously with a mere 4.7 percent of uninsured drivers, according to the Insurance Information Institute. This makes them No. 2 in the country for uninsured drivers with only Massachusetts beating them out. When everyone is insured, prices go down.
Providing real cost estimates
The Insure.com study differs from other studies, such as the National Association of Insurance Commissioners (NAIC) rankings, in that it compares how much it would cost a driver to buy the same coverage in each state. The NAIC rankings calculate the average amount drivers spend on auto insurance -- regardless of what coverages and levels of coverage are purchased.
How much does car insurance cost?
It’s important to remember that these numbers are averages and will not reflect your actual policy price. Insurance prices are highly personalized, and many factors will affect your rates, including the type of vehicle you drive, the coverages you choose to carry, your specific neighborhood and, in certain states, even your credit rating.
Insure.com’s study of the most and least expensive vehicles for 2016 includes easy-to use tool for viewing nationwide car insurance rates for 2016 vehicles or looking at state specific average rates, and allows you to compare up to 10 vehicles at once.
Shop your coverage annually to make sure you are getting the best car insurance rates available, ask for discounts and consider bundling your coverages to save money.
Average cost of car insurance by state
AL AK AZ AR CA CO CT DC DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY More than $100 below national averageWithin $100 of national averageMore than $100 above national average
See Insure.com's Best Car Insurance Companies
Insure.com commissioned Quadrant Information Services to calculate auto insurance rates from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Rates were compiled in February 2016.
We averaged rates in each state for the cheapest-to-insure 2016 model-year versions of America’s 20 best-selling vehicles and ranked each state by that average. Rates are for comparative purposes only within the same model year.
Rates are based on full coverage for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Actual rates will depend on individual driver factors.
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AVERAGE CAR INSURANCE RATES in your neighborhood Invalid ZIP code or data not available X
CarInsurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2014 Honda Accord for every ZIP code in the United States. We calculated rates using data for six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm).
Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.
MOST & LEAST EXPENSIVE ZIP CODES In California HIGHEST RATE:
- 90029- LOS ANGELES: $2,416
- 90020- LOS ANGELES: $2,403
- 90010- LOS ANGELES: $2,402
- 90005- LOS ANGELES: $2,388
- 93441- LOS OLIVOS: $996
- 93437- LOMPOC: $1,025
- 93428- CAMBRIA: $1,027
- 93449- PISMO BEACH: $1,028
- METHODOLOGY +
It’s always wise to compare car insurance rates because the price of a policy can differ by hundreds of dollars. That's because car insurance companies use different formulas when deciding how much you pay. This means you could wind up paying a lot more than you need to if you don’t shop around for the lowest price.
Use our average car insurance rates tool to compare rates. Enter a ZIP code to see the average premium for your neighborhood. You will also see the highest and lowest rates from the six major carriers surveyed to get an idea of what the most affordable car insurance price is in your area. You can shop for a policy now by entering your information after clicking on the "Start Shopping Now" button above.
- Check out your state's minimum insurance requirements. It's possible that the minimum coverage required might not be that different than what you really need.
- When deciding how much coverage you need, make sure you're covered for an amount equal to the total value of your assets.
- To keep premiums low, choose collision coverage with a high deductible, and plan to pay routine repair costs with your own money.
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- How to Lease a Car
- How to Monitor Your Credit Score and Credit Report
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Your auto insurance is a collection of different policies that cover you in different ways. Here’s how they break down:
• Liability coverage – These policies help cover liability and expenses when you’re at fault in and accident. The money will go to the people you hit, but it won’t cover the people in your car.
• Bodily Injury Liability (BIL) – This policy pays for the medical expenses of people injured in a crash in which you’re at fault. You’ll often see BIL policies described as a “20/50” policy or a “100/300” policy. These numbers describe the maximum dollar amount the policy will pay for a single person’s injuries and the maximum for all the injuries sustained by all the occupants of the other car. For example, a 20/50 policy will pay a maximum of $20,000 for a single person’s injuries, and up to $50,000 total for the injuries of everyone in the car you hit.
• Property Damage Liability – This policy pays for damage done to the other car if you’re at fault in an accident. Property liability is sometimes referred to alongside BIL as a third number, so a 20/50/10 liability package will cover up to $10,000 for damages to the other car.
The following policies cover you and your card in an accident:
• Personal Injury Protection (PIP) – This covers your and your passengers’ medical expenses after an accident. If you lose time at work because of your injuries, this policy may also cover lost wages.
• Uninsured/Underinsured Motorist Coverage – This helps cover costs if you are hit by someone without insurance, or minimal coverage.
• Collision – This policy covers repairs to your car after an accident.
• Comprehensive – This policy covers costs if your car is stolen or damaged outside of an accident.
Nearly every state requires car owners to carry auto insurance, and most states have required minimum values for different policies. If you don’t carry insurance, the state can impound your vehicle. To find out what your state’s minimums are, check out this Web site.
Minimum coverage isn’t necessarily all you should have. New Jersey, for example, requires car owners to carry a 15/30/5 liability package. If you’re involved in a serious accident, it’s possible that an individual’s medical expenses could exceed $15,000, or a group’s expenses could total more than $30,000. In addition, $5,000 for car repairs isn’t a lot, considering that the average car now costs a little more than $20,000.
You’re on the hook when costs exceed your coverage limits. That’s why many people opt for policies that cover more than required minimums, particularly if they have assets that can be seized to pay for repairs and medical care.
A good rule of thumb: Make sure you’re covered for an amount equal to the total value of your assets (Add up the dollar values of your house, your car, savings and investments).
How much insurance do you need for yourself?
You probably don’t need to spend a lot of money on a Personal Injury Protection policy. You should be covered if you have health insurance and disability insurance through your employer. Just buy the required minimum.
You do need to make sure you have adequate coverage against uninsured and under-insured drivers. It’s relatively inexpensive in most states (something like $40 a year for $100,000 worth of coverage) and if you are in a collision with an uninsured driver, will help cover costs your health insurance won’t. If you’ve decided to carry BIL for $100,000/$300,000, do the same for yourself.
Collision and comprehensive coverage is worth having if you would want to repair or replace your car after an accident. These policies have a deductible (the amount you have to pay out-of-pocket before coverage kicks in), and they pay out based on the current value of your car, not what you paid for it.
Choose the highest deductible you can afford, because a higher deductible will significantly lower your premium. You’re seeking coverage for major damages to your car, not for every little thing that can go wrong. It’s better to spend $500 of your own money on minor repairs every so often than pay an extra $50 a month whether you need repairs or not. Save collision insurance for when you have car repairs that cost thousands, not hundreds. Remember, if you submit a claim for every little thing, your premium will increase.
A handful of states require car owners to carry no-fault insurance, policies that pay out no matter which driver is at fault in an accident and limit your ability to sue other drivers.
Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, Utah and Puerto Rico requires car owners to carry this protection, though the rules around how these policies work vary by state. These policies tend to be expensive, so be sure to shop around for the best deal if you live in a no-fault state.
How to Shop for Car Insurance
Once you’ve decided how much car insurance you need, it’s time to begin shopping. Auto insurance policies vary widely depending on your car, your driving record and your credit, so it’s wise to do some research.
Go to insweb.com and Insurance.com and fill out the application form. After a short time, you’ll receive comparable quotes from several insurers. There are three kinds of insurers:
Direct sellers – You’re likely familiar with these brand names, such as GEICOs and Progressive. These companies sell coverage directly to you, bypassing traditional insurance agents. Since there’s no agent, there’s no commission; theoretically the savings are passed on to you. But these insurers accept only the best drivers, so you may have trouble qualifying for coverage if you have a history of accidents or moving violations.
Large national brands – Allstate and State Farm are better equipped for drivers with a bit of a blotchy past, and their rates are usually pretty good (they may even be able to match some of the offers from the direct sellers). These companies sell through local agents, but their agents are exclusive—a State Farm agent sells State Farm coverage and nothing else, so you’ll have to do your own comparison shopping.
Independent insurance agents – These sellers offer all kinds of insurance from many different companies. If you have any issues affecting your ability to get coverage (such as a patchy driving record or a teenage driver in your house) independent agents can usually find you better coverage at better prices than what you’d find on your own. Ask friends and family whether they have an insurance agent they would recommend.
A few tips for negotiating with an insurer:
Ask about all available discounts – There is almost always a way to save money. You may get a discount if your car has anti-lock brakes, if you don’t drive your car that often or that far, and so on. Request a list of all possible discounts to see if you qualify.
Skip towing insurance – It’s better to take that extra money and join an auto club (such as AAA) instead. In addition to towing, you’ll have roadside assistance when you need it.
Consider glass insurance - You can chip a windshield at any time, and auto glass is expensive to replace. Just make sure that glass is part of your comprehensive coverage, and not as a separate policy, which can be costly.