Average Cost of Car Insurance in 2023: Find Out!

Car insurance is an indispensable part when buying cars for drivers. The price of insurance may be expensive according to various factors, such as city, age, gender, and state. So, what is the average cost of car insurance?

The average annual premium for auto insurance in the country is $2,148. This equates to an average monthly car insurance premium of about $179.

Keep reading.

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How Much is Car Insurance?

As stated earlier, our analysis of rates for 2023 shows that the average cost of auto insurance is $2,148 annually. However, that is for a good driver with good credit; rates differ greatly depending on your history and the level of coverage you choose.

National average car insurance rates for policies with full coverage are:

$2,148 for a good driver with good credit.
$3,455 for a good driver with poor credit.
$3,164 for a driver with an at-fault accident and good credit.
$3,933 for a driver with a recent DUI and good credit.

For minimum required coverage, national average car insurance rates are:

$685 for a good driver with good credit.
$1,118 for a good driver with poor credit.
$1,044 for a driver with an at-fault accident and good credit.
$1,403 for a driver with a recent DUI and good credit.

Our analysis shows that minimum coverage typically carries rates that are more than twice as high as full coverage. Full coverage car insurance is a great choice especially choosing car insurances.

However, averages don’t reveal much about your auto insurance rates. In order to personalize your price, a number of subjective factors, both under your control and not, move rates up and down.

And because NerdWallet can’t anticipate which factors apply to you, we used a specific driver profile throughout this article, unless stated otherwise:

35 years old.
A good driver is someone who has a spotless driving record, which means they have not been involved in any accidents, DUIs, or other traffic infractions.
Drivers with excellent credit. For the purpose of determining rates, insurers in most states use a credit-based insurance score that is comparable to your standard credit score. Despite the fact that they are not the same, your credit score can be a reliable predictor of your credit-based insurance score.

Average Cost of Car Insurance: Specific Details

Here are the specific details:

State

Where you live, including your state, city, and even your ZIP code are some of the most important factors that determine your car insurance rates.

The average cost of car insurance is $1,638 per year, but we found that the cost of car insurance in the most and least expensive states is separated by $1,786 per year.

The cost of auto insurance varies greatly depending on where you live for a few different reasons. There will be more claims and higher rates in your area if there are more uninsured drivers, more crime, or more frequent natural disasters.

City

Even within the same state, the price of auto insurance varies by city. Average rates in one city can be hundreds or even thousands of dollars more expensive than another city in the same state, so you should be sure to compare quotes and estimate your costs before buying coverage.

The city with the highest annual car insurance premiums is Detroit, where coverage costs $467 per month or $5,609 annually, or $3,971 more than the national average. Detroit is followed by New York City, Miami, and Philadelphia as the cities with the highest auto insurance costs.

Company

Different insurance companies’ car insurance rates can range by thousands of dollars more annually. As a result of our analysis, we were able to determine that the largest companies’ average auto insurance premiums can vary by as much as $91 per month (or $1,090 annually).

Coverage Type and Amount

Your average cost of car insurance also depends on the kinds of coverage and the amount you want to get. A so-called full coverage auto insurance policy includes comprehensive and collision coverage in addition to liability, and raises the cost of insurance by hundreds of dollars a year.

Age

Age is among the most crucial factors that affect auto insurance rates, along with location and the amount of insurance you have. Due to their inexperience behind the wheel, drivers under the age of 25 typically pay much higher premiums for coverage.

The average cost of car insurance before you turn 25 can be thousands of dollars more expensive per year than for older drivers. For instance, a newly licensed 16-year-old will pay $378 more per month ($4,541 more annually) for car insurance than a 25-year-old.

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Gender

Your car insurance rates may also be slightly influenced by your gender. On average, male drivers pay just $10 more per month than female drivers for coverage (but effectively the same amount each month). Additionally, the cost for male and female drivers is nearly equal after age 25. You may want to know: How Long Does It Take to Get Car Insurance?

Marital Status

Whether you’re married, divorced, or single, it can affect how much your auto insurance will cost. We discovered that married drivers experience the lowest auto insurance rates. If you’re married, your rates cost $5 less than average per month.

Your insurance premiums will increase if you’re divorced or single. Single drivers pay an extra $6 per month in car insurance premiums compared to average rates, which are an additional $5.

Questioning how long does GAP insurance last? Maybe you’re curious about your GAP Coverage’s cancellation or refund options. We’ll address all of your GAP Insurance questions in the paragraphs that follow. Read Now!

Average Cost of Car Insurance in 2023: Find Out!

How Car Insurance Premiums Are Calculated?

An “average rate” is hard to calculate, thanks to the myriad rating factors contributing to any driver’s auto insurance premium. For instance, homeowners are likely to pay less overall for auto insurance. Your driving history is also a significant factor because people who have had a DUI are more likely to have much higher insurance rates.

Car insurance is created and priced to suit each unique driver, accurately estimating the risk they pose to an insurer. Car insurance quote costs vary by company as well as by driver. You might discover a sizable price difference between the least expensive company and the most expensive. This is due to the fact that each insurer evaluates a policy based on a unique set of factors.

The national average price of auto insurance should be regarded with caution. Consult an insurance agent or shop around online for the most affordable policy.

How does car insurance work? The purpose of having auto insurance is to safeguard your finances in the event of an accident. Auto insurance can assist in paying for repairs to your car and medical care for your injuries if a tree falls on your car or you are the victim of a hit-and-run. It also provides liability coverage, in case you are at fault for an accident that causes injury or property damage to others.

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What Factors Affect My Car Insurance Price?

Your auto insurance premium will be influenced by a number of additional common rating factors, including your state’s requirements, the type of vehicle you drive, your age (with the exception of Hawaii and Massachusetts), your driving history, and your gender (in most states). Car insurance companies can determine your risk profile and potential insurance costs by examining these rating factors. Explore the answer:How Much is Car Insurance for a 16-year-old, Average Cost of Car Insurance for 18-Year-Olds

Coverage selections: Your rate is significantly influenced by the types of auto insurance coverage you choose. Your rates will most likely increase if you choose higher liability limits, lower deductible levels, or extra optional coverage types like comprehensive and collision coverage.
Insurance history: You might pay less if you’ve had continuous auto insurance for the entire time you’ve held a driver’s license. Absences from your coverage may indicate high-risk behavior and raise your premium (unless you did not own a car during that time).
Annual mileage: Your chances of being in an accident increase as you drive more. Less than 7,500 miles per year is typically required, though this can vary by carrier, for policyholders to qualify for lower rates.

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Average Car Insurance Rate FAQs

What is the Average Cost of Car Insurance?

The typical annual premium in the US is $1,483, or $124 per month. In comparison to the 2020 national average of $1,548 this represents a 4% drop. Why is Car Insurance So Expensive?

How Much Does Car Insurance Cost in My State?

When insurance companies determine your premium, the location you live in—down to the ZIP code you reside in—is a crucial rating factor. The laws and regulations of each state also have an impact on average rates because auto insurance is governed at the state level. For instance, Michigan consistently has the highest car insurance rates, largely as a result of the legal mandated coverage requirements that must be met.

Louisiana, Florida, Kentucky, Rhode Island, Nevada, and California are some other expensive states. Ohio, New Hampshire, North Carolina, Virginia, and Vermont are some of the states where car insurance is most affordable.

Which Car Insurance Companies Have the Most Affordable Rates?

Nationwide had the lowest rates for drivers with typical driving profiles in our survey of the best auto insurance providers. The second-place finisher was GEICO. It’s important to remember that your profile probably won’t exactly match this person’s. Prior to the end of each policy period, shopping around for quotes is the best way to find a cost-effective rate.

How Much is Car Insurance for a Young Driver in Their 20s?

The average cost of auto insurance for drivers between the ages of 20 and 29 is $1,887 annually. For a six-month policy, that works out to $944 or $157 per month. Young drivers in their 20s paid 27% more than the national average.