Average Cost of Car Insurance | Trends and Statistics 2023

The average car insurance policy costs $172 a month for full coverage and $106 for a liability-only policy. That comes to an annual cost of $2,064 and $1,272, respectively. Overall, car insurance prices have increased 17% between the end of 2022 and six months into 2023.

Car insurance prices depend on a variety of factors, including coverage level, vehicle type, driving history, and (in many states) your credit score. 

Your location also has a large effect on your rate, especially in states like Michigan, California, and Florida. However, auto insurance rates are increasing at an alarming pace across the board, mainly due to factors like the price of auto parts and the effects of climate change.

To help you understand how much money you may pay for car insurance, Insurify has created a detailed data research report on the average car insurance costs and how various factors affect them in 2023.

How much does car insurance cost in 2023?

On average, a car insurance policy costs $1,668 in 2023, according to Insurify’s latest report on car insurance pricing. This is a 17% increase from 2022’s average car insurance costs and more than double the 7% increase Insurify data scientists predicted for all of 2023.

Insurify expects prices to increase another 4% by the end of the year, for a total average of $1,742 — a 21% overall increase from 2022. 

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Key takeaways from Insurify’s mid-year auto insurance report

• The national average car insurance policy costs $1,668. Prices have increased 17% between the end of 2022 and in the first six months of 2023, with Insurify’s analysts predicting another 4% increase by the end of the year. 

• Across the U.S., drivers spend about 2.4% of their household income on car insurance.

• Michigan is the most expensive state for car insurance, with an average car insurance policy cost of $231 a month, or $2,776 a year. Michigan drivers saw a 31% increase in rates between 2022 and 2023. This is the third year in a row that Insurify has identified Michigan as the costliest state for car insurance.

• Insurance companies reported a combined loss ratio of 111.8% in 2022, meaning they paid more in claims than they collected in premiums. The loss ratio was 100.8% in 2021, 90.5% in 2020, and 98.2% in 2019, according to S&P Global. 

• New Mexico, Nevada, New Jersey, Michigan, and Indiana are seeing the biggest surges in their car insurance premiums, with an average increase in rates of 33% between 2022 and 2023.

• Car insurance companies are pulling out of California, citing unfavorable legislation that affects premiums, frequent natural disasters, and high labor and parts costs. Other companies are also moving out of Florida, citing high losses as a result of high claims. 

• In 2023, an estimated 31% of drivers purchased a full-coverage policy, a decrease from 63% in 2022. This may be another indicator of drivers removing coverage as car insurance prices surge.

Why car insurance rates are increasing so fast

Insurify’s analysts expect car insurance rates to keep increasing through the end of 2023, projecting an overall 21% increase in costs between 2022 and 2023. Insurify’s projections are based on its platform data of more than 79 million car insurance quotes sourced directly from partnering insurance companies.

The major drivers behind this year’s surging premiums are increasing car repair costs, more frequent and severe climate change-related natural disasters in some regions, and the cost of claims versus policyholders’ premiums.

Car insurance companies are losing money

Car insurance companies are experiencing record-high loss ratios — meaning they’re spending more money paying out claims than they’re collecting in premiums.^[1] 

Let’s say that in a year, an insurer paid $600 for a policyholder’s insurance claim, but that policyholder paid $2,640 in annual premiums. For that year, the insurer’s loss ratio for that car insurance policy is $600 divided by $2,640, or 0.227, which is roughly 23%. As long as insurance companies’ loss ratios are less than 100%, they’re making profits from their policies.

However, the property and casualty insurance sector reported a combined net loss ratio of 111.8% for 2022, which means insurance companies collectively paid more in claims than they earned in premiums for the year. To offset this loss, insurance companies increase premiums.

Car repair costs are higher than ever

The cost of car maintenance and repair is rising, which is one of the many factors that affect car insurance premiums. Car repair costs are 13.5% higher in 2023 than in 2022. This is mostly due to mechanic shortages, hard-to-repair vehicle technology, and increasing average vehicle ages.^[2]

“Repair expenditures affect insurance rates because they raise the financial risk for the insurer,” says Emile Ashikyan, marketing analyst at Infopay Inc. “To counterbalance these rising expenditures, automobile insurance premiums often rise, increasing consumers’ insurance prices.”

Climate change-related natural disasters

Where you live, including the state, city, and ZIP code, affects your car insurance premiums. Areas with frequent severe weather events, including floods, snowstorms, tropical storms, and wildfires, typically have higher rates than areas with milder weather.^[3]

“The frequency and severity of natural disasters have led to some geographical areas experiencing different types of weather events from what they’ve seen before. More vehicles are being caught and destroyed in fires and floods, and ice storms are more frequent, increasing the likelihood of collisions,” says Betsy Stella, vice president of partnerships at Insurify. 

“This has led to auto insurers paying a higher number of — and a higher price for — customer claims. As a result, customers are seeing higher premiums as insurers increase prices to cover these losses.”

Average car insurance costs by state

Among factors like climate risk and auto body prices, states’ car insurance requirements, and the number of uninsured drivers on the road can also influence costs.^[3]

For example, Florida has the highest rate of uninsured drivers, had one of the highest rates of accident fatalities in 2021, and sees some of the most frequent and severe climate catastrophes in the country. These factors can contribute to its higher-than-average car insurance rates.

Most expensive states for car insurance

Michigan, Nevada, and Washington, D.C., are some of the most expensive states for car insurance, all of which experienced double-digit increases in car insurance rates in 2023. 

Below you can find a list of the most expensive states for car insurance, along with how much of the average household income is spent on car insurance in each state. 

States with the fastest-rising car insurance costs

New Mexico, Nevada, New Jersey, Michigan, and Indiana have experienced the highest car insurance rate surges so far in 2023, with an average increase of 33% since 2022. 

Here’s how much car insurance costs are rising, based on Insurify’s proprietary data.

States with the cheapest car insurance rates

Rates aren’t expensive everywhere. Again, where you live has a significant influence on your car insurance premiums.^[3] 

The table below shows the states with the cheapest auto insurance rates.

How much car insurance costs by company

Car insurance costs vary among insurers because each uses a unique method to determine rates by evaluating risk, claims experience, and the cost of doing business.

“Some carriers will weigh personal credit [scores] as part of your risk profile more than others,” says Deon Williams, an agent and policy specialist at 4J Insurance in Frisco, Texas. “By that same token, some carriers are more sensitive to situations involving lapses in prior coverage, juvenile drivers, and claims history.”

Some companies specialize in working with high-risk drivers — such as those with poor credit or at-fault accidents and traffic violations on their driving records. High-risk drivers might end up paying more to balance out the higher risk.

USAA, which caters to people who serve or have served in the U.S. military and their families, offers some of the lowest rates. On the other hand, The General, which specializes in insuring high-risk drivers, has some of the most expensive annual insurance rates.

The following table shows the average monthly quotes for liability and full-coverage insurance for popular car insurance companies.

The below rates are estimated rates current as of: Monday, September 18 at 12:00 PM PDT. 

Data reviewed by Konstantin Halachev

Konstantin HalachevVice President of Engineering

• 7+ years experience in data analysis

• Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

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Insurance Company	Average Quote: Liability Only	Average Quote: Full Coverage
USAA	45	98
State Farm	51	108
GEICO	52	112
Allstate	61	134
American Family	76	171
Dairyland	83	232
Progressive	84	152
Liberty Mutual	87	171
Travelers	89	196
Kemper	95	189
CSAA	97	159
Farmers	104	231
The Hartford	116	164
Bristol West	136	303

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Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.

How much car insurance costs by credit tier

Most states allow auto insurance companies to use your credit score to determine your premiums. Insurers argue that your credit score correlates to your risk of filing a claim, so the higher your credit score, the lower your car insurance rates.^[4]

While auto insurers argue that a correlation exists between credit history and the risk of claims, legislators in some states have banned the practice of using credit scores when underwriting premiums, saying the practice has a disproportionately negative effect on low-income drivers and people of color.

California, Hawaii, Maryland, and Massachusetts have laws in place that ban or limit the use of credit history in setting car insurance premiums.^[5]

The table below shows average monthly quotes for liability-only and full-coverage car insurance for drivers by credit tier.

How much car insurance costs based on your driving record

Your driving record significantly affects your car insurance costs. If you have a history of speeding tickets, DUIs, or other violations, you’ll likely pay higher premiums than someone with a clean driving record.^[6] 

Insurance companies consider drivers with multiple accidents or violations to be higher-risk and calculate rates accordingly.

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Average car insurance rates with a clean record by state

If you have a clean record free of accidents or moving violations, you can expect to pay lower rates than someone with marks on their history. The table below shows the average monthly cost of liability-only and full-coverage insurance for drivers with a clean record, by state.

Average car insurance rates after an at-fault accident by state

An accident on your record can cause your insurance premiums to increase at renewal.^[6] One way to avoid premium increases after an accident is to add an accident forgiveness rider to your policy. The table below shows the average monthly cost of liability-only insurance and full-coverage insurance for drivers with at-fault accidents, listed by state.

Car insurance rates after a DUI by state

A DUI is a serious charge that can cause your car insurance premiums to skyrocket. Depending on the severity of the charge, your car insurance company may not even renew your policy.^[6] The table below shows the average monthly cost of liability-only insurance and full-coverage insurance for drivers with a DUI/DWI, listed by state.

Car insurance rates by age and gender

A driver’s age and gender also affect car insurance rates. Teens and younger drivers have less experience on the road and are considered a higher risk, while some research shows that men are more likely to file a claim. As such, these groups typically pay more for insurance.^[3]

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Costs by age

Generally, car insurance companies charge young drivers higher premiums due to their lack of experience behind the wheel and because inexperienced drivers are more likely to make mistakes that could lead to an accident.^[3]

Teen drivers aged 16 to 19 years old have a fatal crash rate almost three times as high as drivers 20 and older, according to the Centers for Disease Control and Prevention.^[7]

The table below shows average monthly quotes for liability-only and full-coverage insurance for drivers by age group.

Costs by gender

Male drivers tend to pay more for car insurance than female drivers because they tend to get in more accidents. Williams refers to it as the James Dean effect.

“The idea of living fast and looking good seems more pervasive amongst young male drivers than young female drivers,” Williams says.

Data from the CDC backs that up. The motor vehicle crash death rate for males ages 16 to 19 is three times as high as that for females in the same age group.^[7]

On average, male drivers pay 11% more for full-coverage insurance and 5% more for liability-only insurance than female drivers. However, that data may be skewed by young male drivers. 

While male teenagers pay more for insurance than female teenagers, female drivers older than 25 — and particularly ages 40 to 60 — pay more for auto insurance than their male counterparts.

But some states — including California, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania — have laws prohibiting insurers from setting auto insurance rates based on gender.^[8]

Average cost of car insurance by vehicle type

The type of vehicle you drive is a major factor that affects your car insurance rates. If you have a high-end luxury car, you’ll likely face higher premiums than someone driving an economy model because high-end vehicles have higher repair costs due to their more expensive parts and specialized features.^[3]

But your vehicle doesn’t have to be a luxury car to be costly to insure. Depending on the age and make of your vehicle, it may be difficult to get coverage in general. 

For example, Progressive and State Farm are refusing to write new policies for older Kia and Hyundai vehicles in some cities because they’re too easy to steal.

“Two words: Kia Boyz,” Williams explains, referring to a TikTok trend of people across the country stealing 2011 and later Kia vehicles, taking them for joyrides, and posting the whole thing.

“This new TikTok phenomenon has led to some major carriers no longer insuring particular models of cars due to increased likelihood of thefts leading to massive casualty and property damage claims,” Williams says.

A vehicle’s safety record, average repair costs, and theft rates can also affect your premiums.^[3]

The following table shows average quotes for liability-only and full-coverage insurance by different vehicle types.

Other factors that affect car insurance costs

In addition to the factors above, several other factors can affect the cost of car insurance:^[3]

• How much you drive: The more you drive, the more opportunities you have to be in a car accident. So you’ll pay more for car insurance if you drive your car for work or have a long daily commute.

• Selected coverages: Many insurance companies offer additional coverages beyond liability, comprehensive, and collision coverages. Adding glass coverage, gap insurance, custom equipment coverage, roadside assistance, or rental reimbursement coverage will increase your monthly premiums.^[9]

• Your deductible: The higher your deductible, the lower your monthly premiums will be. However, higher deductibles also mean higher out-of-pocket costs when you file a claim, so it’s important to consider your financial situation when selecting a deductible.

Methodology

Data scientists at Insurify analyzed more than 79 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers’ vehicles, driving records, and demographic information.

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates. With this data, Insurify is able to offer drivers insight into how companies price their car insurance premiums.

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