The top 10 states with the highest car insurance

What are the top 10 states with highest car insurance?

Louisiana, Michigan, Nevada, Florida, Washington, D.C., California, Colorado, Delaware, New Jersey and Texas are the 10 most expensive states for car insurance.

Louisiana

Louisiana has the highest car insurance rates in the country, with average annual premiums of $3,999. That’s almost $1,500 more than the national average. Why? Severe weather plays a major role. Hurricanes and other severe storms cause extensive damage including flooding, which means a lot of claims. There are other factors, though. One of them is increased lawsuits. Another is uninsured drivers — Louisiana has a high number of them. Population density and a considerable number of drivers on the road play a big part.

• Average annual premium for full coverage: $3,999
• Dollar difference from national average: $1,456

Michigan

Michigan’s average annual car insurance rate is $3,964, which is $330 higher than the national average. According to a 2023 report by the Insurance Information Institute (Triple-I), Michigan has a high number of uninsured drivers. Michigan’s no-fault insuranceAn auto insurance system where medical expenses are covered by your insurer regardless of fault. Personal injury protection (PIP) and medical payments (MedPay) are no-fault insurance coverages. laws play a role in the high cost of coverage. Although recent legislation has made some changes, the high limits on personal injury protectionPersonal injury protection (PIP) pays for your medical, hospital and funeral expenses resulting from a car accident, regardless of who's at fault. have historically driven up the cost of claims and created a system ripe for fraud. As a result, Michigan has spent a lot of time among the most expensive states for car insurance.

• Average annual premium for full coverage: $3,964
• Dollar difference from national average: $1,386

Nevada

Nevada has an annual average rate of $3,963. A high volume of tourists on the road, high medical costs and high crash severity all contribute to the high cost of car insurance in Nevada.

• Average annual premium for full coverage: $3,963
• Dollar difference from national average: $1,385

Florida

Florida’s average annual car insurance rate is $3,916, $1,388 more than the national average. Florida has some of the most severe weather in the country. It has also experienced many lawsuits, uninsured drivers, and fraud related to claims. Florida is a no-fault state, a system meant to reduce lawsuits, but in practice, it hasn’t worked out that way. Florida has more insurance litigation than any other state.

• Average annual premium for full coverage: $3,916
• Dollar difference from national average: $1,388

Washington, D.C.

Washington, D.C.'s high population density and traffic, which result in many accidents and vehicle thefts, make car insurance expensive. The annual average for car insurance is $3,465, $887 above the national average. Although it’s not a state, D.C. makes our list due to a population that is as great as or greater than that of some states.

• Average annual premium for full coverage: $3,465
• Dollar difference from national average: $887

California

Car insurance costs about $3,444 per year in California, which is $866 more than the national average. Many parts of California have heavy traffic patterns, leading to a high number of accidents. Los Angeles, for example, has 27% of the entire population of the state and over 6.7 million drivers. With the cost of car parts increasing, insurance companies have to pay out more for claims. California has had multiple wildfires in recent years, which have caused thousands of claims. All these factors play a part in increasing car insurance rates. 

• Average annual premium for full coverage: $3,444
• Dollar difference from national average: $866

Colorado

Colorado's annual average car insurance rate is $3,181. The state experiences severe weather, and hail damage from various storms wreaks havoc on cars, which is one reason for higher premiums. Also, like the other states on the list, uninsured drivers are a problem in Colorado. 

• Average annual premium for full coverage: $3,181
• Dollar difference from national average: $603

Delaware

Car insurance rates in Delaware average $3,157 a year, $579 above the national average. Delaware's no-fault insurance system contributes to higher rates, as does its high population density.

• Average annual premium for full coverage: $3,517
• Dollar difference from national average: $579

New Jersey

The average cost of car insurance in New Jersey is $3,122 a year, driven up by high population density, high rates of litigation, expensive healthcare and the state's coastal location, prone to hurricanes.

• Average annual premium for full coverage: $3,122
• Dollar difference from national average: $544

Texas

At $3,106 a year, Texas' average car insurance rates are $528 a year above the national average. Frequent severe weather drives rates in Texas, as does the population density of major cities.

• Average annual premium for full coverage: $3,106
• Dollar difference from national average: $528

States with the highest car insurance rates by coverage level

The amount and type of car insurance you purchase will directly impact how much you pay for car insurance. However, because states have different mandatory coverage limits, the cost of a state minimum policy will be very different by state.

Below, you can compare the highest car insurance rates by state for state minimum car insurance, liability only coverage at 50/100/50, and full coverage car insurance with liability limits of 100/300/100 and $500 deductibles.

Highest car insurance rates by city

The cities with the highest insurance rates are Dearborn, Michigan, at $5,213 annually, Las Vegas and North Las Vegas, Nevada, at $5,196 and $5,159 respectively, and Tampa, Florida, at $5,034.

The table below compares rates in the top cities in each state to the state average.

Why do insurance rates vary by state?

“Car insurance rates can vary from state to state based upon various factors,” says Cindy Baroway, executive director of risk management & insurance (RMI) program at the University of Colorado Denver. “They are:

1. The required minimum liability rates in each state
2. Jury verdict awards for auto accident cases
3. Personal Injury Protection (PIP) requirements or not
4. Number of uninsured motorists in the state
5. Types of storms that damage cars—such as hail in Colorado (claims frequency and severity)
6. Frequency of auto thefts and/or vandalism.”

The amount of liability insurance you must legally carry varies by state. This means the price for basic insurance will vary as well. There are many other things that go into car insurance rates, however. Some states, such as Florida, have had a high incidence of lawsuits related to insurance claims. 

Another factor is the number of uninsured or underinsured drivers in a particular state. Most of the states on the list have a lot of uninsured drivers, and this puts a strain on those who do have insurance. The risk is pooled together for everyone to pay, so essentially, you’re paying for accidents that both insured and uninsured people are involved in. Some states require uninsured motorist coverage to combat the costs of uninsured accidents, but that drives up rates for insured drivers as well.

Weather is another huge factor that affects car insurance costs. Severe weather and natural disasters like wildfires damage a lot of property, causing hundreds or thousands of claims all at once. This means the insurance company must not only do extra administrative work to process claims but also pay out millions of dollars in a short period of time. This can cause rates to increase significantly. Sometimes an insurer leaves a state if there are too many natural disaster claims because it’s not worth it to their bottom line. This makes it difficult for drivers to find competitive insurance quotes.

How drivers can lower their insurance costs

Baroway points to the following ways to lower your car insurance rates:

• Have a good motor vehicle record—no accidents, no points, or low points on their driving record
• Increase deductibles
• Take driver training courses (usually age-dependent—for new drivers such as high schoolers or for older drivers)
• Carry only the coverage you need (on an older car, full coverage may not be necessary or worth the cost)
• Have a good insurance score (this is based on your credit history, so work to improve it)

While some factors are out of your control, like the weather, cost of car parts and healthcare and the number of uninsured drivers on the road, these are things you can do to keep your personal costs down.

Methodology

Insurance.com commissioned average car insurance rates in all 50 states and Washington. D.C. through Quadrant Information Services. National and state average rates are based on three coverage levels: state minimum, 50/100/50 liability-only, and full coverage with 100/300/100 liability and $500 deductibles. 

Unless otherwise indicated, averages are based on our full coverage data set. This data set is based on:

• Bodily injury liability of $100,000 per person and $300,000 per incident
• Property damage liability of $100,000 per incident
• Comprehensive and collision deductibles of $500
• 40-year-old driver
• Honda Accord LX
• Good credit
• A clean driving record
• 12-mile commute, 10,000 annual mileage

Learn more about our data and methodology.

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