Average Cost of Car Insurance in 2021


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The average car insurance cost in 2021 is $2,646 per year, which breaks down to approximately $221 per month.

That’s the overall average, but it can change quite a bit depending on a variety of factors, including age, driving record, and location.

How much of an impact do those factors have on a driver’s auto insurance rates? The Ascent, a Motley Fool service, pulled the most recent data to find out. Keep reading for a detailed look at what drivers are paying across the nation.

Key findings

  • Americans pay an average of $2,646 in annual auto insurance premiums.
  • Standard coverage ($2,915) costs almost four times as much on average as minimum coverage ($764).
  • The Mid-Atlantic has the highest regional average for car insurance ($3,016). The non-mainland states have the lowest ($1,631).
  • Michigan has the highest average car insurance premiums across the board, while Hawaii has the lowest average for car insurance at $1,096
  • Drivers with poor credit pay over twice as much for car insurance as drivers with excellent credit in states that allow carriers to use credit history when setting rates.
  • Young drivers pay much higher car insurance premiums, with an average annual cost of $5,988 for 18-year-olds.
  • GEICO and USAA have the cheapest auto insurance rates among major providers.

National average cost of car insurance

National average car insurance paid annually

National average car insurance paid twice per year

National average car insurance paid monthly

$2,646

$1,323

$221

Data source: Quadrant Information Services.

Americans pay an average auto insurance cost of about $221 per month. Since that’s an overall average, it includes everyone, from drivers with spotless records to those who have had accidents, a poor credit history, or other issues.

Drivers with good credit and clean driving records can often qualify for cheap auto insurance. However, this also depends on where they live and the type of coverage they want.

National average cost of car insurance by coverage type

Coverage type

Average annual auto insurance premium

Average monthly auto insurance premium

Minimum coverage

$764

$64

Standard coverage

$2,915

$243

Minimum coverage provides insurance equal to the minimum amount required by the state where the driver lives. Each state has its own requirements.

There are two states, New Hampshire and Virginia, where drivers aren’t required to have auto insurance. They do have minimum coverage requirements for drivers who choose to purchase insurance.

A standard coverage insurance policy generally includes three different types of car insurance coverage:

  • Liability coverage for medical and repair costs sustained by other parties if the driver is responsible for an accident.
  • Collision coverage for the cost of repairing or replacing the driver’s vehicle in the event of a collision with another vehicle or an object.
  • Comprehensive coverage for repair or replacement costs that aren’t related to a collision.

Average cost of car insurance by region

Data source: Quadrant Information Services.

The Mid-Atlantic has the most expensive car insurance rates, and it’s the only region with an average higher than $3,000. Auto insurance is much more affordable in the non-mainland states of Alaska and Hawaii.

Average car insurance cost by state

State

Average annual car insurance rate

Average monthly car insurance rate

Alabama

$2,482

$207

Alaska

$1,758

$147

Arizona

$2,668

$222

Arkansas

$2,671

$223

California

$2,346

$196

Colorado

$2,602

$217

Connecticut

$3,435

$286

Delaware

$3,175

$265

District of Columbia

$3,040

$253

Florida

$3,997

$333

Georgia

$2,736

$228

Hawaii

$1,096

$91

Idaho

$1,901

$158

Illinois

$2,183

$182

Indiana

$1,778

$148

Iowa

$1,728

$144

Kansas

$2,428

$202

Kentucky

$3,413

$284

Louisiana

$4,312

$359

Maine

$2,340

$195

Maryland

$2,880

$240

Massachusetts

$1,972

$164

Michigan

$4,894

$408

Minnesota

$2,652

$221

Mississippi

$2,411

$201

Missouri

$2,646

$221

Montana

$2,583

$215

Nebraska

$2,492

$208

Nevada

$2,870

$239

New Hampshire

$2,386

$199

New Jersey

$3,720

$310

New Mexico

$2,018

$168

New York

$3,909

$326

North Carolina

$1,595

$133

North Dakota

$2,620

$218

Ohio

$1,567

$131

Oklahoma

$2,763

$230

Oregon

$2,143

$179

Pennsylvania

$2,491

$208

Rhode Island

$3,063

$255

South Carolina

$2,712

$226

South Dakota

$2,560

$213

Tennessee

$2,272

$189

Texas

$2,785

$232

Utah

$2,398

$200

Vermont

$1,947

$162

Virginia

$2,220

$185

Washington

$2,001

$167

West Virginia

$2,479

$207

Wisconsin

$2,023

$169

Wyoming

$2,405

$200

Data source: Quadrant Information Services.

Michigan is the state with the most expensive auto insurance by a wide margin. At $4,894, its average rate is over $500 higher than second-place Louisiana. Florida, New York, and New Jersey round out the top five.

On the other end of the list, Hawaii has the cheapest cost of car insurance at $1,096. It’s followed by Ohio, North Carolina, Iowa, and Alaska.

Why do average auto insurance premiums by state vary so much? Here are the main factors that cause car insurance to cost more or less:

  • Accident rates
  • Crime rates
  • Percentage of uninsured drivers
  • Population density

State average car insurance cost by coverage type

State

Average annual (monthly) rate for minimum coverage

Average annual (monthly) rate for standard coverage

Alabama

$617 ($51)

$2,748 ($229)

Alaska

$440 ($37)

$1,946 ($162)

Arizona

$910 ($76)

$2,919 ($243)

Arkansas

$591 ($49)

$2,968 ($247)

California

$643 ($54)

$2,590 ($216)

Colorado

$603 ($50)

$2,888 ($241)

Connecticut

$1,206 ($101)

$3,754 ($313)

Delaware

$1,114 ($93)

$3,469 ($289)

District of Columbia

$933 ($78)

$3,341 ($278)

Florida

$1,417 ($118)

$4,366 ($364)

Georgia

$958 ($80)

$2,990 ($249)

Hawaii

$376 ($31)

$1,199 ($100)

Idaho

$476 ($40)

$2,104 ($175)

Illinois

$627 ($52)

$2,405 ($200)

Indiana

$478 ($40)

$1,964 ($164)

Iowa

$348 ($29)

$1,925 ($160)

Kansas

$534 ($45)

$2,698 ($225)

Kentucky

$1,112 ($93)

$3,742 ($312)

Louisiana

$1,167 ($97)

$4,761 ($397)

Maine

$643 ($54)

$2,583 ($215)

Maryland

$974 ($81)

$3,152 ($263)

Massachusetts

$520 ($43)

$2,180 ($182)

Michigan

$1,909 ($159)

$5,321 ($443)

Minnesota

$864 ($72)

$2,908 ($242)

Mississippi

$595 ($50)

$2,670 ($223)

Missouri

$686 ($57)

$2,925 ($244)

Montana

$470 ($39)

$2,885 ($240)

Nebraska

$454 ($38)

$2,783 ($232)

Nevada

$1,099 ($92)

$3,123 ($260)

New Hampshire

$599 ($50)

$2,641 ($220)

New Jersey

$1,328 ($111)

$4,061 ($338)

New Mexico

$472 ($39)

$2,239 ($187)

New York

$1,491 ($124)

$4,254 ($355)

North Carolina

$454 ($38)

$1,758 ($147)

North Dakota

$482 ($40)

$2,926 ($244)

Ohio

$417 ($35)

$1,732 ($144)

Oklahoma

$616 ($51)

$3,069 ($256)

Oregon

$827 ($69)

$2,331 ($194)

Pennsylvania

$542 ($45)

$2,769 ($231)

Rhode Island

$952 ($79)

$3,364 ($280)

South Carolina

$419 ($35)

$2,866 ($239)

South Dakota

$891 ($74)

$2,972 ($248)

Tennessee

$540 ($45)

$2,520 ($210)

Texas

$712 ($59)

$3,081 ($257)

Utah

$731 ($61)

$2,637 ($220)

Vermont

$445 ($37)

$2,161 ($180)

Virginia

$641 ($53)

$2,446 ($204)

Washington

$611 ($51)

$2,200 ($183)

West Virginia

$658 ($550

$2,739 ($228)

Wisconsin

$448 ($37)

$2,248 ($187)

Wyoming

$362 ($30)

$2,697 ($225)

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Data source: Quadrant Information Services.

In addition to having the highest overall average cost of car insurance, Michigan is also the most expensive state for minimum coverage and standard coverage.

There were some deviations from the overall averages. For example, Wyoming has the second-cheapest minimum coverage, even though it didn’t even make the top 20 for cheapest car insurance overall. But for the most part, minimum and standard coverage costs fell in line with a state’s overall average.

National average cost of car insurance by credit history

Credit history

Average annual auto insurance rate

Average monthly auto insurance rate

Excellent credit

$1,703

$142

Poor credit

$3,622

$302

Data source: Quadrant Information Services.

In most states, a car insurance company can use a driver’s credit history to set their car insurance rates. When this is allowed, drivers with excellent credit save a lot of money. They pay less than half of what drivers with poor credit do for car insurance. It’s a good reason to increase your credit score if it isn’t in the excellent range yet.

Here are the states that don’t allow auto insurance companies to base rates on a driver’s credit history:

  • California
  • Hawaii
  • Massachusetts
  • Michigan

National average cost of car insurance by gender

Gender

Average annual rate

Average monthly rate

Female (with clean driving record)

$2,182

$182

Male (with clean driving record)

$2,208

$184

Data source: Quadrant Information Services.

These averages are taken from drivers with clean driving records. They don’t include drivers with tickets or accidents, which is why both of them are less than the overall national average.

Female drivers pay a little less than male drivers for car insurance because they’re a lower risk. Statistics show that male drivers are more likely to speed, drive under the influence of alcohol, and not wear seatbelts. They’re also often involved in more severe crashes.

National average cost of car insurance for younger and older drivers

Age

Average annual rate

Average monthly rate

18 years old

$5,988

$499

65 years old

$1,979

$165

Data source: Quadrant Information Services.

Younger drivers have much higher car insurance premiums than any other group due to the risk they present. Because they’re inexperienced and more likely to drive recklessly, they’re also more likely to be involved in accidents.

The good news for teen drivers is that insurance rates drop considerably every year for a few decades — at least for those who avoid negative marks on their driving records. There are also insurance companies that offer relatively cheap auto insurance for teens and young drivers.

The fifties and sixties tend to be when drivers pay the lowest auto insurance rates. By that point, most people have decades of driving experience.

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Insurance rates can start to rise once drivers hit their seventies. Slower reaction times, vision loss, and hearing loss are all common among senior citizens and lead to an uptick in insurance rates.

National average cost of car insurance by driving record

Driving record

Average annual rate

Average monthly rate

Clean record

$2,551

$213

One speeding ticket

$2,766

$231

One accident

$3,092

$258

Data source: Quadrant Information Services.

It pays to have a clean driving record. Those who do score rates about $18 per month less than drivers with a speeding ticket and about $45 per month less than drivers who have been in an accident.

National average cost of car insurance by provider

Insurance company

Average annual rate

Average monthly rate

Allstate

$2,912

$243

American Family

$1,955

$163

Erie Insurance

$2,021

$168

Farmers

$2,831

$236

GEICO

$1,758

$147

Nationwide

$2,214

$185

Progressive

$2,325

$194

State Farm

$2,147

$179

Travelers

$2,362

$197

USAA

$1,871

$156

Data source: Quadrant Information Services.

These averages are proof that drivers don’t always flock to the insurance carrier with the lowest prices.

State Farm, Allstate, and Progressive are the largest auto insurance companies by market share. Of the three, State Farm is the only one that makes the top five when it comes to lowest average rates. Allstate comes in last with annual rates over $250 greater than the national average.

GEICO and USAA offer the least expensive auto insurance on average.

Editor’s note: Our data included the average car insurance rates for dozens of companies, but we went with 10 of the largest providers in the country for this list. You may be able to get a better deal with a smaller local provider, so be sure to get insurance quotes from multiple insurers.

How to reduce your car insurance costs

There are several ways to cut your auto insurance premiums. Here are some tips that can help you save:

  • Shop around at least once per year to compare rates with the best car insurance companies. Most let you get a quote online.
  • Look for discounts. Insurers may offer discounts for installing antitheft devices in your vehicle, taking a defensive driving course, driving a low number of miles per year, and more.
  • See if you can pay less overall by bundling your car insurance with your homeowner’s insurance.
  • Adjust your coverage. It may be worth raising your deductible if you have a solid emergency fund or reconsidering how much car insurance you need if you have an older vehicle.
  • Improve your credit. A high credit score can help you pay less for auto insurance in most states.

Most importantly, practice safe, defensive driving habits. If you have a clean driving record, it can help you qualify for the lowest insurance rates for your age group and location.

Sources

The data found on this page is a combination of publicly available quote data obtained directly from the carrier as well as insurance rate data from Quadrant Information Services. These rates were publicly sourced from the top ten (10) to fifteen (15) carrier markets, within each state, based on annual written premium and should be used for comparative purposes only — your own quotes may be different.


View more information: https://www.fool.com/the-ascent/research/average-cost-car-insurance/

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