How Much Is Car Insurance? Average Costs and What Drives Them

What the national averages say

The National Association of Insurance Commissioners (NAIC) collects premium data that insurers report in every state. NAIC data shows these national averages for private passenger auto insurance:

Divided by 12, that is roughly $107 a month for the average expenditure and roughly $120 a month for the combined premium. If you only carry liability, the liability figure is the better comparison. If you carry collision and comprehensive, the combined figure is closer to your situation.

These are averages across millions of drivers, so treat them as a reference point, not a prediction of your bill.

Why your price can be very different from the average

Two neighbors with the same car can pay very different amounts. Insurers set prices using rating factors that help predict how likely a claim is and how expensive it could be. The biggest ones are:

• Where you live and park. ZIP codes with more traffic, theft, vandalism, lawsuits or severe weather usually cost more. NAIC notes that urban areas tend to have higher rates than suburban or rural areas.
• Your driving record. At-fault accidents, speeding tickets and especially DUIs raise premiums for several years.
• Age and experience. Newly licensed drivers, especially teens, have higher crash rates and pay the most.
• The vehicle. Cars that cost more to repair, are stolen more often or produce more injury claims cost more to insure. You can compare models in our vehicle insurance cost index.
• Coverage choices. Higher liability limits, lower deductibles and optional coverages add cost. Liability-only is the cheapest legal option in most states.
• Other factors such as annual mileage, how the car is used, your insurance history and, in states that allow it, a credit-based insurance score.

Each insurer weighs these factors differently, which is why quotes for the same driver can vary widely. Our guide on how car insurance rates are calculated explains each factor in detail.

Why car insurance feels so expensive

Premiums follow claim costs. When it costs more to fix cars and treat injuries, insurers file for higher rates with state regulators. Several forces push those costs up:

• Repair complexity. Bumpers, mirrors and windshields often hold cameras and sensors that must be replaced and recalibrated after a crash. Research from the Highway Loss Data Institute (HLDI), an affiliate of IIHS, found that crash avoidance technology reduces how often claims happen but tends to make each collision repair more expensive.
• Medical bills and lawsuits. Injury claims include hospital care, rehab and lost wages. Areas with more litigation tend to have higher liability costs.
• Theft and weather. Vehicle theft, hail, flooding and wildfire drive up comprehensive claims in affected regions.
• Uninsured drivers. The Insurance Research Council estimates that roughly 15% of U.S. drivers are uninsured. Insured drivers carry part of that risk through uninsured motorist coverage.
• Fraud. Staged crashes and padded claims add to everyone's cost.

NAIC figures show how quickly this can add up: the national average expenditure rose about 14% between the two years compared in the NAIC report.

Why costs vary so much from state to state

State law shapes prices as much as local conditions do. Each state sets minimum coverage, decides whether it uses a no-fault system, and regulates how insurers may price. For example:

• No-fault states require personal injury protection (PIP), which pays your own medical bills regardless of fault. That extra required coverage can raise the average premium.
• Minimum limits differ widely, so the cheapest legal policy in one state may carry much more coverage than in another.
• Rating rules differ. Some states restrict or ban certain factors, such as credit history or gender.
• Local costs differ, including population density, repair labor rates and storm exposure.

Each page in our state directory shows the NAIC average for that state along with context such as uninsured driver estimates and traffic fatality data.

How to estimate your own cost

We are not an insurer or agent, so we can't quote a price. We can help you build a realistic estimate before you shop:

1. Decide how much coverage you need. Start with your state's legal minimums, then consider higher limits if you have savings, income or a home to protect. The coverage checker shows what your state requires.
2. Run an estimate. The premium estimator starts from public NAIC averages for your state and adjusts for details you enter, such as age band, driving record and vehicle type.
3. Compare vehicles if you're car shopping. The same driver can pay noticeably more for one model than another.
4. Get real quotes. Contact several licensed insurers or agents with identical coverage choices so the comparison is fair.

An estimate is a planning tool. Your actual premium depends on each insurer's rules and on information they verify, such as your motor vehicle record and claims history.

Ways to lower what you pay without cutting critical coverage

• Shop at every renewal. Prices for the same driver can differ a lot between insurers, and each company re-rates on its own schedule.
• Ask about discounts such as multi-policy, good student, safe driver, paid-in-full and telematics programs. See our guide to car insurance discounts.
• Raise deductibles carefully. A higher collision and comprehensive deductible lowers the premium, but choose an amount you could pay tomorrow without borrowing.
• Rethink physical damage coverage on an older car. If the car is worth little, collision coverage may cost more over time than it could ever pay back.
• Keep your record clean and avoid gaps in coverage. Both affect future prices.
• Don't cut liability to the bone. Liability protects your savings and future income if you cause a serious crash, so it's usually the last place to save money.

Related guides

• How Car Insurance Rates Are Calculated: The Rating Factors Explained
• Car Insurance Discounts: Common Types, Who Qualifies and What to Ask
• Full Coverage vs. Liability Only: What Each Means and When to Switch
• Minimum Car Insurance Requirements: What "30/60/25" Means and Why It's Rarely Enough
• How to Read a Car Insurance Quote and Compare Offers Apples to Apples