How much is car insurance?
A year of full coverage costs around $2,000 in 2023
Car insurance comes in many forms, but all policies serve the same basic purpose: to protect you from having to pay thousands (or tens of thousands) out of pocket after an accident.
Most states require you to carry a minimum amount of liability insurance, which only covers the other driver’s repairs and medical bills if you cause an accident. But most insured drivers opt for additional coverage, with 79% purchasing comprehensive coverage and 75% purchasing collision coverage, either for more protection or simply because their loan or lease agreements mandate it.
- The average annual cost of auto insurance in 2023 is around $2,000 for full coverage, based on data we compiled across multiple industry sources.
- $2,000 represents a 70% increase from 2020, when the national average was around $1,176.
- While we don’t have the precise data yet, trends indicate that the most expensive states for car insurance in 2023 will be Louisiana, Rhode Island and New York, and the cheapest will be Maine, Wisconsin and Iowa.
- Age and gender are the biggest factors that influence car insurance rates. Eighteen-year-old men pay the most, but 35-year-old women actually pay up to 21% more than men of the same age with identical driving profiles.
Average cost of car insurance
The average cost of full-coverage auto insurance is around $2,000 in 2023. How did we get to that number? According to the National Association of Insurance Commissioners (NAIC), the average cost of full-coverage auto insurance nationwide was $1,176 in 2020.
We don’t have precise data for 2023 as of publication; we may not learn what the actual average cost for auto insurance is for 2023 until late 2025 or early 2026. In the meantime, however, there are plenty of estimates floating around that can give us some idea:
- Insurance aggregator site Insurify estimates that the average cost of full-coverage car insurance will hit $1,895 in 2023, which is 7% higher than the 2022 average.
- QuoteWizard says it’s $1,949.
- Kiplinger claims it’s passed the $2,000 mark, rising to $2,014.
With these estimates, we think it’s safe to say the average cost of full-coverage auto insurance is probably around $2,000 in 2023.
If these estimates prove true, $2,000 would represent a 70% rise in car insurance rates from 2020 to 2023. That’s high, but probably not a surprise, given sky-high rates.
» COMPARE: Car warranty vs. car insurance
Car insurance rates by state for 2023
While we don’t have accurate data for 2023 yet, we do have accurate data for 2020 and dozens of estimates to suggest that rates are roughly 70% higher three years later. By combining different sources, we can estimate which states have the least and most expensive car insurance rates.
Most expensive states for auto insurance in 2023
|Rank||State||Average cost of full coverage in 2020 (NAIC)||Estimated cost of full coverage in 2023|
The national average for full coverage was $1,176 in 2020, and we anticipate it’ll be something like $2,000 for 2023.
Least expensive states for auto insurance in 2023
|Rank||State||Average cost of full coverage in 2020||Estimated cost of full coverage in 2023|
As you can see, the disparity between the most expensive ($2,865) and least expensive ($1,341) is wide. On average, drivers in Maine pay less than half of what drivers in Louisiana pay. This might have you asking: What other factors might be impacting my car insurance rates?
Cost of car insurance by age
You’ve probably heard — or noticed in your own bills — that car insurance rates tend to fall with age. They generally peak when you’re a teenager, drop off when you’re 25 and keep going down after that.
Data supports this. Progressive estimates that rates tend to peak at age 18, fall 40% by age 25 and keep trending downward until age 74. Then, after a half-century of declining rates, you might see a rise in rates from age 75. “While most drivers in their 80s are more experienced than anyone else on the road, the effects of age can impact our reflexes and reaction times.”
Keep in mind that drivers’ claims histories vary, so not everyone gets a major discount for their quarter-life crisis. “... if you're in an accident right before you turn 25, your rate may not drop,” according to Progressive.
Fair enough. But why do young adults pay so much more to begin with, even if they drive like their driver’s ed teacher never left the car? The reasons are many, says Rachel Bodine of AutoInsurance.org. Statistically, the following statements are true of young drivers:
- They’re more likely to get into serious accidents than drivers in other age groups.
- They have objectively less experience.
- They’re more likely to drive recklessly.
- They have lower credit scores (or none at all).
Perhaps most importantly, young drivers simply end up filing more claims than drivers in other age groups. And if a particular demographic files more claims and asks providers to pay more money, the provider will in turn charge that entire demographic higher premiums to stay in business.
Car insurance rates by gender
So, men pay more, right?
In 2018, following a Michigan woman’s transition from male to female, her auto insurance rates instantly increased by $970.08.
When they’re young, definitely. An analysis by QuoteWizard found that, on average, 18-year-old men pay $5,124 annually for full coverage, compared with $4,118 for women of the same age — a $1,006 difference. Among other reasons, the assumption is that young men are just more likely to drive recklessly, cause accidents and file claims.
QuoteWizard found that by age 35, however, men pay $720 on average annually, and women pay $739, despite women having cleaner overall driving records.
A 2022 study by the Consumer Federation of America (CFA) brought this discrepancy to light, finding that when all other factors were controlled, female drivers in Delaware still paid up to 21% more. In 2018, a transgender woman in Michigan discovered that following her transition from male to female, her auto insurance rates instantly increased by $970.08 per year.
“Many auto insurers are charging women with perfect driving records higher premiums simply because of their gender,” said Douglas Heller, director of insurance at CFA. In response, some state legislators are trying to ban the practice altogether. So far, the following states officially prohibit the consideration of gender in auto insurance rates:
- North Carolina
In short, men pay more upfront due to their driving behavior, and women pay more later for no apparent reason.
How to save on car insurance
With premiums skyrocketing an estimated 70% since 2020 alone, you’re probably keen to get your rates down as much — and as quickly — as possible. Some ways to do this:
- Ask for discounts. Call your provider and simply ask, “What discounts am I qualified for?” The agent will typically spend a few minutes on the phone with you, helping you hunt for ways to save money. You may find that you save 4% just for being in a sorority or 7% for recently getting married and buying a home.
- Set up autopay. Some providers discount up to 5% just for setting up autopay or for paying your six-month premium in full. “Full pay, autopay and bank draft payments can mean large discounts,” said Phil Minnes, an American Family Insurance agent in Norcross, Georgia.
- Enroll in your provider’s driver monitoring program. Most major providers have a telematics program that monitors your driving behavior and rewards you with up to a 30% discount for safe driving. There’s often a discount just for signing up.
- Buy less insurance. While most auto leases and loans require full coverage for the duration of the agreement, you can still raise your deductibles or lower your limits to save a few bucks.
- Find a better deal. It’s never been faster or easier to get auto insurance quotes online. If you find a better deal but like your current provider, you can show your provider the competing offer and ask for a quote match. For a list of companies to start with, check out our guide to the best car insurance companies.
- Take an online defensive driving course. Most providers will reward you with discounts of up to 10% just for taking a 90-minute defensive driving course online. One of our writers netted hundreds in savings over three years, all for taking a course that cost $25.
» SAVE MORE: How to get cheap car insurance
Is car insurance legally required?
Forty-eight states and Washington, D.C., require auto insurance. New Hampshire lets you opt out of auto insurance if you can prove you have sufficient funds to cover an accident. Virginia lets you opt out by paying a $500 uninsured motorist fee each year.
What is the minimum auto coverage required by law?
Minimum coverage varies by state; check your state here.
How do I choose the right auto coverage for my needs?
The best way to pick the right amount of auto insurance is to start with your state’s minimum (or the full-coverage requirements stated in your loan/lease agreement) and work your way up from there. Unless you’re on a strict budget, you’ll probably want more than your state’s minimum so you can reduce your financial liability on the road.
Can I switch car insurance providers at any time?
You can switch auto insurance at any time, and doing so can save you money. Just be careful not to leave a gap in coverage, which may raise rates in the future.
Will my car insurance rate change if I move to another state?
Almost certainly. Changing states means you’ll have a new address, and your new area may have different weather patterns, population density, accident rates and more. All these changes may impact your auto insurance rates.
- Article sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- National Association of Insurance Commissioners, “2019/2020 Auto Insurance Database Report.” Accessed May 12, 2023.
- Insurify, “2022 Auto Insurance Trends Report: Part II.” Accessed May 12, 2023.
- QuoteWizard, “Average Cost of Car Insurance (May 2023).” Accessed May 12, 2023.
- Kiplinger, “Car Insurance Rates Have Surged, and Where You Live Matters.” Accessed May 12, 2023.
- Progressive.com, “Auto insurance for seniors.” Accessed May 12, 2023.
- AutoInsurance.org, “Six Reasons Why Auto Insurance Costs More for Young Drivers (Rates + Discounts).” Accessed May 12, 2023.
- QuoteWizard, “Car Insurance Costs for Men vs. Women.” Accessed May 12, 2023.
- Consumer Federation of America, “Report Finds Gender Disparity in Auto Insurance Premiums, Women Charged More for Same Coverage.” Accessed May 12, 2023.
- WXYZ, “Transgender woman shocked by higher car insurance rates for women in Michigan.” Accessed May 12, 2023.
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