Average car insurance costs in 2020

  • The average cost of car insurance in the United States is $2,388 per year or $199 per month, according to data from nearly 100,000 policyholders from Savvy.
  • The state you live in, the level of coverage you'd like to have, and your gender, age, credit history, and driving history will all factor into your premium.
  • While a California driver might pay between $987 and $1,815 per year, a driver in New York may pay between $1,352 and $2,752 per year for coverage.
  • That said, you'll want to shop around and see which insurance company will have the best price for you. Before you start shopping, use this guide to get an idea of car insurance prices. 
  • Check out our partner Savvy — a free tool that lets you compare car insurance quotes in minutes  »

If you're in the market for your next car insurance policy, expect to pay $2,388 per year, or $199 per month per month for coverage — the national average cost in the US according to data from over 100,000 car insurance policies from Savvy. But, it's important to understand all the factors that can go into the price you'll pay for coverage, since not everyone's cost is the same.

Car insurance policies have lots of moving parts, and your premium, or the cost you'll pay for coverage, is just one of them. Insurance is regulated at the state level, and laws on required coverage and auto insurance pricing are different in every state. Insurance companies take into account many different factors, including the state and area where you live, as well as your gender, age, driving history, and the level of coverage you'd like to have.

Business Insider compiled data from industry regulators, personal finance publications, and comparison sites to find out which factors affected car insurance costs the most, and what the typical driver can expect to pay. Here are the biggest factors that will influence the price you'll pay for coverage, and what to consider when looking at your car insurance options. 

Keep in mind that there have been some big changes to car insurance costs during the coronavirus pandemic. Some car insurers are offering discounts as Americans drive less, and are also helping people affected by the virus postpone payments.

  • How much does car insurance cost in my state? 
  • Average car insurance cost by coverage type
  • What's the difference in average car insurance cost for men and women?
  • Average car insurance premiums by age
  • Average car insurance cost by company
  • How car insurance prices change with the number of cars you own
  • How auto insurance prices vary by driver profile and history
  • Other factors that can impact the cost of car insurance 

How much does car insurance cost in my state? 

Every state handles car insurance differently. States regulate their own laws and policies about car insurance coverage, including how much coverage is required, how much insurance is responsible for covering, and what factors insurance companies can use to determine rates.

In some states, like New Hampshire, car insurance isn't even required. In Michigan, car insurance is expensive because of a no-fault law requiring unlimited coverage for personal injury protection. Regulations like these will be big factors in the amount you'll pay for coverage. 

Business Insider put together a list of average car insurance prices for each state. These rates were determined as an average of rates reported by Nerdwallet, The Zebra, ValuePenguin, Bankrate, and the National Association of Insurance Commissioners. Here's a range car insurance costs by state.

StateAverage Annual Car Insurance PremiumRange
Alabama$1,314$868 – $2,078
Alaska$1,393$1,028 – $1,502
Arizona$1,291$973 – $2,699
Arkansas$1,295$906 – $2,213
California$1,364$987 – $1,815
Colorado$1,355$982 – $3,164
Connecticut$1,541$1,151 – $2,619
Delaware$1,400$1,241 – $2,513
District of Columbia$1,406$1,331 – $2,793
Florida$1,341$1,257 – $3,370
Georgia$1,374$1,048 – $2,619
Hawaii$1,377$873 – $1,548
Idaho$1,280$680 – $1,777
Illinois$1,243$885 – $2,313
Indiana$1,203$755 – $1,489
Iowa$1,215$702 – $1,482
Kansas$1,215$863 – $2,190
Kentucky$1,313$939 – $3,418
Louisiana$1,308$1,405 – $3,525
Maine$1,421$704 – $2,340
Maryland$1,487$896 – $2,431
Massachusetts$1,539$1,129 – $1,866
Michigan$1,207$1,272 – $8,723
Minnesota$1,268$875 – $2,693
Mississippi$1,286$994 – $2,208
Missouri$1,193$872 – $2,584
Montana$1,261$864 – $2,525
Nebraska$1,220$831 – $2,038
Nevada$1,291$1,103 – $3,190
New Hampshire$1,534$819 – $2,004
New Jersey$1,553$1,104 – $3,013
New Mexico$1,243$938 – $2,194
New York$1,474$1,352 – $2,752
North Carolina$1,346$789 – $1,692
North Dakota$1,230$773 – $1,979
Ohio$1,195$789 – $1,688
Oklahoma$1,328$1,005 – $2,659
Oregon$1,304$905 – $2,205
Pennsylvania$1,452$971 – $2,018
Rhode Island$1,455$1,304 – $3,847
South Carolina$1,335$973 – $2,112
South Dakota$1,199$767 – $2,338
Tennessee$1,334$871 – $1,821
Texas$1,391$1,110 – $2,594
Utah$1,382$873 – $2,538
Vermont$1,450$764 – $1,769
Virginia$1,442$843 – $1,498
Washington$1,359$918 – $1,691
West Virginia$1,283$1,026 – $2,131
Wisconsin$1,219$737 – $1,590
Wyoming$1,301$847 – $2,118

Source: Data from Nerdwallet, ValuePenguin, Bankrate, The Zebra, and the National Association of Insurance Commissioners.

Average car insurance cost by coverage type

As a general rule, the more a policy covers, the more car insurance costs. 

You'll often see quotes listed with numbers and slashes — a 50/100/50 policy would cover up to $50,000 of injury protection for each person involved in an accident, up to $100,000 worth of injuries per incident, and up to $50,000 of property damages per incident. 

As these coverage limits go up, your premium will increase. Every state has a different minimum requirement, making auto insurance coverage more expensive in some states than others. 

Some policies go beyond the minimum coverage in a state, offering additional protection. Collision coverage can help repair your car if it's damaged in an accident, and comprehensive policies can protect it in events like storms and disasters. However, these additional coverage types will increase your costs. According to Nerdwallet, additional coverage could raise your premium by about $1,000 per year. 

What's the difference in average car insurance cost for men and women?

Gender does influence car insurance, at least in states that allow insurers to consider it. And from Business Insider's data, car insurance companies tend to charge women more. 

Business Insider collected quotes from Allstate and State Farm for basic coverage for male and female drivers with an identical profile in Austin, Texas. When swapping out only the gender, the male profile was quoted $1,069 for coverage per year, while the female profile was quoted $1,124 per year for coverage, costing the woman driver 5% more. That held true in other cities and states across the country, including Seattle, Miami, Chicago, and Columbus, Ohio. On average, the profiles for women were quoted $172 higher. 

But, there is a relationship between age and gender. According to data from The Zebra, young men tend to pay about 14% more for coverage. The gap in costs for coverage gets smaller as young men approach their mid-20s. 

However, six states — California, Hawaii, Massachusetts, Pennsylvania, North Carolina, and Montana — don't allow gender as a factor in premium pricing. 

For transgender and nonbinary individuals, auto insurance pricing is generally calculated by the gender marker indicated on a driver's license. In states where X is a gender option on driver's licenses — including Oregon, California, Maine, and soon New York — insurers are still determining how to calculate costs.

Average car insurance premiums by age

The number of years you've been driving will affect the price you'll pay for coverage. While an 18-year-old's insurance averages $2,667.89 per year, the average 30-year-old's price drops to $1,883.93.

Car insurance costs tend to fall with age. But, that makes insuring a teen driver incredibly expensive. But, it's also important to remember that it will vary from person to person, regardless of your age based on other factors like your driving history.

Here's the breakdown of the average car insurance cost across age groups, according to data from Savvy.

AgeTypical Car Insurance Costs
18$2,667.89
19$2,692.89
20$2,732.06
21$2,546.33
22$2,365.29
23$2,198.17
24$2,114.49
25$2,001.98
30$1,883.93
35$1,787.98
40$1,864.52
45$1,780.05
50$1,770.83
55$1,542.06
60$1,493.07
65$1,267.34

Average car insurance cost by company

The below data is based on 49,928 policyholders with a similar driver profile. This data was provided to Business Insider by Savvy.

InsurerAverage Monthly Premium
Root$130
State Farm$149
GEICO$156
Progressive$162
Nationwide$164
Mercury$168
Allstate$176
Travelers$176
USAA$177
Farmers$178
Safeco$179
esurance$180
Liberty Mututal$180
American Family$181
Bristol West$182
MetLife$213

How car insurance prices change with the number of cars you own

In some ways, it's logical: the more cars you have on your policy, the higher your car insurance bills. 

But, there are also some savings when multiple cars are on one policy. When you have more cars on the same policy, the price of coverage for each car falls. Here's how the price per car changes, according to data from Savvy:

Number of vehicles on policyAverage Annual Car Insurance PremiumAverage price per car
1$1,929$1,929
2$2,621$1,310.50
3$3,280$1,093.33
4$4,258$1,064.50

How auto insurance prices vary by driver profile and history

By this point, you're probably starting to see how much information goes into a car insurance quote. There are many more factors that are also considered: 

  • Younger (or newer) drivers pay more. New drivers are 73% more expensive than a driver with 16 or more years of driving experience, according to quotes obtained from the California Department of Insurance.
  • Married drivers pay more. When you're married, auto insurance costs 42% more, according to quotes from the California Department of Insurance.
  • Drivers with a previous accident on their records pay more. After an accident, premiums jump 30%, according to Insurance.com and Insure.com reporting, based on data from Quadrant Information Services.
  • Drivers with a DUI on their record pay more. With a DUI on your record, insurance will cost 63% more, according to Insurance.com and Insure.com reporting.
  • Drivers with poor credit scores pay more. Consumer Reports compiled rate pricing information from car insurance companies in every state, and found that credit scores were one of the biggest factors in premium costs. In Michigan, a driver with poor credit will pay about $2,470 more each year than someone with excellent credit — and $444 more in Ohio, $1,512 more in Texas, and $251 more in North Carolina. Three states (California, Hawaii, and Massachussetts) don't allow credit scores to be factored into car insurance prices. 
  • Drivers who live in more urban areas pay more. Car insurance is cheaper in zip codes that are more rural, and the same is true at the state level. Insure.com data shows that Iowa, Idaho, Wisconsin, and Maine have the cheapest car insurance of all states, and that's because they're more rural states. 

Other factors that can impact the cost of car insurance 

There are a few other factors that will contribute to your premium, including: 

  • The amount of miles you drive per year. If you don't drive many miles per year, you're less likely to be involved in an accident. 
  • What type of car you drive. The more expensive the car would be to replace, the more it will cost to insure.
  • Previous insurance coverage. If you've had a gap in coverage, it could increase your premium. According to ValuePenguin data, a lapse in coverage for more than 30 days meant 29% higher premiums. 

Car insurance has lots of factors that go into its pricing. And, it's changed over time. Data from the National Association of Insurance Commissioners shows just how much car insurance premiums have increased over time. The chart below shows how auto insurance prices have increased between 2007 and 2016: 

But, the biggest effect on auto insurance costs is whether you're shopping around. Each insurance company looks at all of these factors and prices your coverage differently as a result. It's critical to compare what you're offered. Get quotes from several different auto insurance companies and compare them to make sure you're getting the best deal for you. 

Source: Read Full Article