Largest change in full coverage premium
Annual Report
The true cost of auto insurance in 2024
To paint a clear picture of the true cost of car insurance, we analyzed what percentage of household income is spent on an annual full coverage car insurance policy. Nationally, the average cost of full coverage car insurance rose to $2,543 in 2024, an increase of 26 percent over last year. With a national median household income of $74,580 according to the latest data from the U.S. Census Bureau, Americans spend 3.41 percent of their income on car insurance.
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AVERAGE ANNUAL PREMIUM
$2,543for full coverage insurance
HIGHEST TRUE COST
Louisianahighest percentage of income spent on car insurance
PERCENT OF INCOME SPENT
3.41%on full coverage insurance
LOWEST TRUE COST
Massachusettslowest percentage of income spent on car insurance
Average annual premium
The national average cost for full coverage car insurance is $2,543 per year, or $212 per month. Drivers with minimum coverage pay an average of $740 a year, or $62 a month.
Highest True Cost
Drivers in Louisiana have the highest true cost of car insurance, with an average annual premium of $3,618 — 6.53 percent of their household income. Florida and Michigan are next in line on the true cost ranking, with 5.69 and 5.01 percent of their household income going toward car insurance, respectively.
Percent of income spent
Based on the median annual income of $74,580, the average U.S. driver spends 3.41 percent of their income on full coverage car insurance policy.
Lowest True Cost
Massachusetts drivers enjoy the nation's lowest true cost of car insurance. While the average insurance premium in Massachusetts isn't the cheapest at $1,665 per year for full coverage, when considering the state's median income of $94,488, drivers in the Bay State pay only 1.76 percent of their annual income toward car insurance.
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How much do Americans pay for auto insurance?
With the average cost of full coverage car insurance increasing 26 percent over last year, you may be shopping around for a new policy. Looking at average rates in your region can give you a starting point for comparing quotes. Explore the interactive map below to see the true cost of auto insurance in all 50 states and the top 25 metro statistical areas (MSAs).
Average annual premium
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Percent of income spent
%
Change of percentage of income spent vs 2023
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*2024 calculations for the percentage of income spent on auto insurance use the most recent median income data from the U.S. Census. All previous True Cost of Auto Insurance reports utilized average income data from the U.S. Census. Bankrate chose to switch to median income data in 2024 as a more representative statistic of what people earn in a given geographic area.
To determine the true cost of car insurance, Bankrate’s insurance editorial team analyzed the average total percentage of household income spent on car insurance. Next, we assigned a true cost ranking to each state and 25 metros in the country. The higher the ranking, the higher the true cost of car insurance.
The true cost of auto insurance in 2024 by state
|
State
|
True Cost Ranking
|
Average annual premium
|
Percent of income spent
|
|---|---|---|---|
| Alabama | 37 | $2,199 | 3.68% |
| Alaska | 21 | $2,330 | 2.64% |
| Arizona | 33 | $2,535 | 3.40% |
| Arkansas | 42 | $2,190 | 3.95% |
| California | 27 | $2,697 | 2.95% |
| Colorado | 30 | $2,902 | 3.25% |
| Connecticut | 14 | $2,155 | 2.44% |
| Delaware | 29 | $2,625 | 3.19% |
| Florida | 49 | $3,945 | 5.69% |
| Georgia | 35 | $2,610 | 3.58% |
| Hawaii | 2 | $1,654 | 1.79% |
| Idaho | 6 | $1,421 | 1.95% |
| Illinois | 28 | $2,310 | 3.01% |
| Indiana | 17 | $1,634 | 2.45% |
| Iowa | 13 | $1,681 | 2.42% |
| Kansas | 39 | $2,624 | 3.81% |
| Kentucky | 44 | $2,549 | 4.29% |
| Louisiana | 50 | $3,618 | 6.53% |
| Maine | 8 | $1,507 | 2.17% |
| Maryland | 20 | $2,493 | 2.62% |
| Massachusetts | 1 | $1,665 | 1.76% |
| Michigan | 48 | $3,356 | 5.01% |
| Minnesota | 16 | $2,013 | 2.44% |
| Mississippi | 41 | $2,055 | 3.90% |
| Missouri | 45 | $2,801 | 4.32% |
| Montana | 32 | $2,232 | 3.30% |
| Nebraska | 25 | $1,989 | 2.86% |
| Nevada | 47 | $3,549 | 4.91% |
| New Hampshire | 4 | $1,636 | 1.82% |
| New Jersey | 22 | $2,555 | 2.65% |
| New Mexico | 38 | $2,210 | 3.70% |
| New York | 46 | $3,840 | 4.83% |
| North Carolina | 19 | $1,705 | 2.53% |
| North Dakota | 10 | $1,637 | 2.27% |
| Ohio | 12 | $1,514 | 2.30% |
| Oklahoma | 43 | $2,548 | 4.27% |
| Oregon | 18 | $1,901 | 2.51% |
| Pennsylvania | 40 | $2,790 | 3.89% |
| Rhode Island | 31 | $2,683 | 3.28% |
| South Carolina | 26 | $1,879 | 2.93% |
| South Dakota | 24 | $1,942 | 2.79% |
| Tennessee | 23 | $1,807 | 2.77% |
| Texas | 36 | $2,620 | 3.62% |
| Utah | 7 | $1,929 | 2.16% |
| Vermont | 5 | $1,353 | 1.83% |
| Virginia | 11 | $1,975 | 2.30% |
| Washington | 3 | $1,643 | 1.80% |
| West Virginia | 34 | $1,881 | 3.46% |
| Wisconsin | 15 | $1,732 | 2.44% |
| Wyoming | 9 | $1,581 | 2.26% |
Louisiana drivers have the highest true cost rank of 50, shelling out an average of 6.53 percent of their income toward car insurance. Historically, Florida consistently has higher insurance costs than most states and has the second-highest true cost ranking, with drivers spending a whopping 5.69 percent of their income on car insurance on average. Florida and Louisiana both experience frequent catastrophic claims from extreme weather. Since insurance rates are determined with risk and historical data in mind, the high financial risk insurance companies and reinsurance companies take on in both states is likely a driving factor of these high premiums.
After analyzing 25 major metro areas, our research found that drivers in Detroit pay the highest net average cost of car insurance and highest true cost of car insurance, with a staggering 7.98 percent of income spent on auto coverage. Florida is also home to three of the six MSAs with the highest true cost of insurance: Miami, Tampa and Orlando.
Massachusetts has the lowest true cost rank of 1, with drivers spending 1.76 percent of their income on car insurance. While the average rate of car insurance increased this year for Washingtonians by 32 percent, that is still much lower than the national average rate increase of 26 percent. Hawaii drivers spend only slightly more on car insurance at 1.79 percent.
In terms of the lowest percentage of income spent on car insurance for MSAs, Seattle takes first place with a True Cost score of 1.65. Boston and Washington, D.C., are not far behind with True Cost score of 2.01 and 2.07, respectively. All three of these metros have median household incomes over $100,000 per year. New York stands out as the MSA with the highest median household income at $136,405 per year, but its high average full coverage cost of $4,198 per year puts it in the middle of the pack in terms of true cost ranking.
From population density to weather patterns, your car insurance rate is strongly influenced by where you live. However, insurance is multifaceted. Several other rating factors, such as driving experience and life events, are assessed to assemble an insurance premium based on your unique driving characteristics.
How much have auto insurance rates increased?
Nationally, the average cost of full coverage car insurance increased by 26 percent in 2024, but some states saw larger rate hikes. Missouri saw a massive 44 percent increase in the average annual cost of full coverage car insurance, from $1,943 in 2023 to $2,801 in 2024 — the biggest increase in any state. Florida has the highest average rate of full coverage car insurance at $3,945 per year, an increase of $762 from the year before.
When it comes to rising auto insurance costs, drivers in Wyoming seem to have caught a break. The average cost of full coverage car insurance in the Equality State dropped by $1 from 2023 to 2024 — resting at $1,581.
Largest premium change by state
Largest premium change by metro
Smallest premium change by state
Smallest premium change by metro
Largest change in full coverage premium
Smallest change in full coverage premium
Smallest change in full coverage premium metro
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How you can save on auto insurance
The national average of full coverage car insurance is currently $2,543, a $529 increase over last year. In 2021, the average cost of full coverage car insurance was $1,674, meaning a 52 percent increase in just three years.
Whether your insurance premium is higher or lower than the national average, understanding how car insurance companies evaluate risk and calculate your premium can help you find ways to save money.
Several factors influence your rate, and some you can't control. These include state-mandated car insurance requirements, population density and driving habits of others living in your state or ZIP code. Inflation and extreme weather, which are both significant influencers for rates in 2024, are also beyond your control. However, driving history, vehicle type, coverage limits and — for drivers in most states — credit history are all variables you can control to positively influence your premium.
Focus on your driving
| Driving incident | Average annual premium | % of income spent |
|---|---|---|
| Clean driving record | $2,543 | 3.41% |
| Lapse in coverage | $2,819 | 3.70% |
| Speeding | $3,066 | 4.03% |
| At-fault accident | $3,577 | 4.70% |
| DUI | $4,790 | 6.29% |
*Premium listed for full coverage policies
Your location
Location significantly impacts the cost of your car insurance policy. Risk implications from population density, traffic and weather patterns and the cost of medical care vary between states, cities and ZIP codes. Medical bills related to a car accident in New York City are likely to be much more expensive than costs for a similar incident in Buffalo, New York, which directly impacts the cost of coverage types like bodily injury liability and personal injury protection (PIP). Even states like California and Michigan, which do not allow the use of specific ZIP codes as a rating factor, use territories and rated locations to determine premiums.
Our study of MSAs in California demonstrates the True Cost range you can see even within a single state. In Los Angeles, which has a true cost rank of 17, drivers pay an average of just $66 more per year for full coverage car insurance than their Golden State counterparts in San Francisco—which has a True Cost score of 7.
Your driving record
The driving history of you and other drivers on your policy is one of the most substantial rating factors in which you have some influence. Drivers with a lapse of insurance coverage, speeding tickets, at-fault accidents or DUIs on their record may be deemed high-risk and pay significantly more for insurance than those in standard or preferred risk groups. Our research shows that the national average cost for drivers with a lapse of insurance is $2,819 per year for full coverage car insurance — $276 more than drivers who maintain continuous coverage.
Standout statistics:
- Hawaii drivers see the smallest surcharge in premium after a speeding ticket conviction, only paying an average of $109 more per year, an increase of 7 percent.
- Drivers in California see the largest average increase in premiums following one at-fault accident at 56 percent. In terms of dollars, Michigan drivers see the biggest average jump with an average premium increase of $1,764.
- North Carolina drivers experience the most drastic average premium increase following a DUI conviction, paying an average of 287 percent more per year.
- Out of all the metro areas we analyzed, drivers in Detroit see the largest premium increase following a DUI, paying an additional $8,585 more for car insurance per year — putting their annual average premium for full coverage car insurance at $14,272.
Your credit history
In the majority of states, insurance companies utilize credit-based insurance scores to determine your level of risk, which directly impacts your premium. A credit-based insurance score differs from a typical credit score in the kind of risk it evaluates. FICO scores are modeled to predict the risk of a borrower becoming delinquent on payments, whereas credit-based insurance scores measure the risk of loss from future claims in relation to your premium.
Statistically, drivers with lower credit scores file more claims. The fairness of using credit as a claims predictor is a subject of hot debate, and four states — California, Hawaii, Massachusetts and Michigan — prohibit or limit credit as a rating factor for car insurance.
Standout statistics:
- The national average premium for drivers with poor credit is $4,338 for full coverage insurance — $1,795 more than drivers with excellent credit with the same level of coverage.
- New York is the least forgiving to drivers with poor credit, with drivers paying $7,996 per year for full coverage car insurance. This is 108 percent more than the state average premium for drivers with good credit.
Adding a teen driver
Driving is a skill learned over time, and teen drivers tend to pay more for car insurance until they earn enough experience on the road to move into a more standard risk group. According to teen driving statistics, the fatality crash rate for 16- to 19-year-olds is nearly three times the rate for drivers ages 20 and over due to factors such as speeding, distracted driving and lack of seat belt usage.
Adding a teen driver to your car insurance policy can be expensive. Insuring a teen driver on their parents' policy costs an average of $5,421 per year, $2,878 more than a policy without a young driver. The 2024 cost to insure a teen driver is 23 percent higher than last year’s average annual premium of $4,392.
Hawaii and Massachusetts are the two states that prohibit the use of age as a rating factor. However, Massachusetts does allow insurers to use a driver’s years of driving experience as a rating factor. Generally, insurance companies consider any driver under the age of 25 a youthful operator. Fortunately, many carriers offer discounts specifically geared towards this age to help offset the increased insurance cost.Standout statistics:
- Michigan showed the biggest jump in premium when adding a 16-year old to a full coverage insurance policy with an average premium of $7,942 — an increase of $4,586.
- In South Dakota, parents adding a 16-year-old driver to their policy see the lowest rate increase at just $1,363. This is only a 70 percent increase, much lower than the national average increase of 113 percent.
What vehicle you choose
No matter how level-headed we try to be, buying a car tends to be an emotional decision. If you are financing a car, the loan amount and interest rate are likely your primary concern. While the year, make and model of the vehicle you drive can significantly impact your premium, how the rates of various policy coverage types are impacted is complex. Getting a car insurance quote for your new vehicle before signing on the dotted line can help you understand how certain vehicles and features may increase your rate.
Typically, vehicles that cost more to repair or replace will cost more to insure. Luxury vehicles usually cost more to insure than more standard vehicles. A BMW 330i has an average annual full coverage premium of $899 more than that of a Honda Odyssey, for example. This is likely because BMWs have more expensive parts and can require a special technician for repairs.
Some features may make a vehicle more expensive overall, but could lower the cost of other coverage types. For example, advanced safety technology like blind spot detection may add to the cost to repair or replace a vehicle but could also make collisions much less likely. In this scenario, you may notice that you pay less for your liability coverage — which pays for the damages you cause to others — but more for your collision coverage. A vehicle with advanced anti-theft features may also see that the cost of the comprehensive coverage is reduced, but again, the cost of collision may be higher due to the expense of the technology.
Lastly, the risk factor associated with the driver's behavior behind certain vehicles makes a difference. Vehicles designed to be fast, like muscle cars with high horsepower, tend to attract drivers who want to drive fast, which indicates risky behavior.SECTION
The current and future state of auto insurance
The auto insurance industry isn't static. Factors like inflation, extreme weather, poor driving habits and high repair costs will continue to impact rates.
Rates are still on the rise in 2024
Inflation is slowing down in some sectors, but car insurance rates skyrocketed in 2024, and as of yet, there is no indication of them stalling anytime soon. Across the board, insurance providers filed for several rate increases over the past few years and, once approved, these changes become effective upon policyholders' next renewal. However, even if you saw an increase at your last renewal, that doesn't mean the rates will remain the same in the future.
“Auto insurance rates have been rising at a breakneck pace," said Greg McBride, chief financial analyst for Bankrate. "And though the pace of increases will eventually slow, that doesn’t mean premiums are coming down. The insurance market is very competitive — lots of commercials — so shop around and compare coverage to see if you can get a better deal elsewhere. If you have a healthy savings cushion, see if increasing your deductible can reduce your premiums.”
Insurance companies can and have filed for multiple increases throughout the year. For example, after an almost two-year rate filing freeze, the California Department of Insurance finally approved 111 rate requests by mid-December of 2023 and still had 80 left to review. Car insurance rates generally do not decline but can stabilize, which may happen in 2025.
Correction: A previous version of last year's 2023 True Cost of Auto Insurance report listed different average annual premiums for Detroit, Philadelphia, Phoenix, Riverside/San Bernardino and Boston. The premiums for these metro statistical areas have been updated in all reports to address data anomalies.
About this report
Download report (PDF)
Meet the author
Shannon Martin is a licensed insurance agent and Bankrate analyst with over 15 years of experience in the industry. She enjoys helping others navigate the insurance world by cutting through complex jargon and empowering readers to make strong financial decisions independently.
Meet the editor
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2024 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are estimates and weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
ZIP codes: Premiums for each state and metro were calculated by evaluating rates across a representative list of ZIP codes for each metro statistical area and state. ZIP codes used vary from year to year to account for population density changes.
Credit-based insurance scores: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” For ‘credit score decreased,’ rates were assessed when the drivers’ score went from ‘good’ to ‘poor.’ Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or restrict the use of credit-based insurance scores as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts, and Michigan. In Michigan, insurers are allowed to use information that contributes to your credit score but not the score itself.
Incidents: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.
Model: To determine cost by vehicle type, we evaluated our base profile with the following vehicles applied: BMW 330i, Ford F-150, Honda Odyssey, Toyota Prius and Toyota Camry (base).
Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.
Teens: Rates were determined by adding a 16-year-old teen to a 40-year-old married couple’s policy. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations, although Massachusetts allows insurers to use a driver’s years of driving experience.
Income data: Median annual income data was calculated using 2022 data, the most recent available, provided by the U.S. Census Bureau. 2024 calculations for the percentage of income spent on auto insurance use the most recent median income data from the U.S. Census. All previous True Cost of Auto Insurance reports utilized average income data from the U.S. Census. Bankrate chose to switch to median income data in 2024 as a more representative statistic of what people earn in a given geographic area.
If you would like to schedule an interview with Shannon, please contact Bankrate's PR Team