The True Cost of Auto Insurance in 2021 The True Cost of Auto Insurance in 2021 Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content
The true cost of auto insurance in 2021
Annual report Advertiser Disclosure Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. Advertiser Disclosure Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. Bankrate Logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money . Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate Logo The Bankrate promise
At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate Logo Editorial Integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate Logo How We Make Money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Bankrate Logo Insurance Disclosure
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Bankrate analyzed car insurance premiums in each U.S. state and metropolitan statistical area to reveal the true cost of auto insurance – the portion of annual income drivers are spending on auto insurance alone. Our findings concluded that Americans spend an average of $1,674 a year, or 2.44% of their income, on full coverage car insurance. 1 How much do Americans pay for auto insurance
Explore the true cost of auto insurance in all 50 states and the top 25 metro statistical areas (MSAs). True cost rankings are determined by the average total percentage of income spent on car insurance and not average premiums. The higher the ranking, the higher the true cost of car insurance. Map of United States of America National Avg. annual premium $0 % of income spent 0% Life events that affect cost Credit score decreased Added cost $0 Annual premium $0 Life events that affect cost Received a speeding ticket Added cost $0 Annual premium $0 Life events that affect cost Caused an accident Added cost $0 Annual premium $0 Life events that affect cost Lapse in coverage Added cost $0 Annual premium $0 Life events that affect cost Convicted of a DUI Added cost $0 Annual premium $0 Life events that affect cost Insured a teenage driver Added cost $0 Annual premium $0 of 50 states Bankrate utilized current data from Quadrant Information Services to understand the average cost of auto insurance for every U.S. state and metro statistical area. Each location was assigned a “True Cost Rank” — a score between one and 50 for states and one and 25 for most populous metro areas. The lower the ranking, the smaller percentage of total income drivers spend on car insurance premiums. By State Avg. annual premium $0 than nat. avg. % of income spent 0% than nat. avg. Life events that affect cost Credit score decreased Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Received a speeding ticket Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Caused an accident Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Lapse in coverage Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Convicted of a DUI Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Insured a teenage driver Added cost $0 than nat. avg. Annual premium $0 than nat. avg. of 25 most populated metros Bankrate utilized current data from Quadrant Information Services to understand the average cost of auto insurance for every U.S. state and metro statistical area. Each location was assigned a “True Cost Rank” — a score between one and 50 for states and one and 25 for most populous metro areas. The lower the ranking, the smaller percentage of total income drivers spend on car insurance premiums. By Metro Area Avg. annual premium $0 than nat. avg. % of income spent 0% than nat. avg. Life events that affect cost Credit score decreased Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Received a speeding ticket Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Caused an accident Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Lapse in coverage Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Convicted of a DUI Added cost $0 than nat. avg. Annual premium $0 than nat. avg. Life events that affect cost Insured a teenage driver Added cost $0 than nat. avg. Annual premium $0 than nat. avg. A majority of Americans allocate a portion of their monthly paycheck to car insurance premiums, but what is the true cost of car insurance over time? Understanding your monthly car insurance output could impact other areas of your life. When life happens, like getting a ticket or a credit score decrease, these costs can increase thousands of dollars more. The national average for full coverage auto insurance is $1,674 per year, but Americans can pay significantly different rates depending on their location. Scroll over the interactive U.S. map above to see average rates in your state or metro area and how these common life events affect them. Each state is ranked between one and 50, and each city is ranked between one and 25. The lower the ranking, the less impact your auto insurance premiums have on your annual income, based on average percentages. Knowing how much other drivers pay for auto insurance in your area can help you understand how your premiums stack up against the average. The factors that determine your premium are ever-changing and may increase or decrease your premium over time. States vary by degree of impact as well. Drivers in California may be surprised to learn that although they pay nearly $400 more than the national average for full coverage insurance, at $2,065 per year, events such as coverage lapses negatively impact their rates the least compared to other states. See how common life events may impact rates in your area above. True cost rank by state The percentage difference displayed is between each state’s average premium and the national average annual cost of full coverage car insurance, $1771. True cost rank is based on the average total percentage of income spent on car insurance, not average premiums. The higher the ranking, the higher the true cost of car insurance. Sort direction icon Sort direction icon Sort direction icon Sort direction icon 40 $1623 % difference 17 $1559 % difference 25 $1547 % difference 45 $1914 % difference 32 $2065 % difference 36 $2016 % difference 23 $1845 % difference 29 $1775 % difference 49 $2364 % difference 44 $1982 % difference 1 $1127 % difference 7 $1045 % difference 18 $1485 % difference 14 $1254 % difference 15 $1260 % difference 27 $1698 % difference 47 $2128 % difference 50 $2724 % difference 4 $965 % difference 16 $1877 % difference 2 $1223 % difference 46 $2309 % difference 20 $1643 % difference 48 $1782 % difference 35 $1661 % difference 39 $1737 % difference 22 $1531 % difference 42 $2245 % difference 5 $1275 % difference 19 $1757 % difference 33 $1419 % difference 43 $2321 % difference 24 $1325 % difference 12 $1264 % difference 8 $1034 % difference 41 $1873 % difference 13 $1346 % difference 21 $1476 % difference 38 $2018 % difference 30 $1512 % difference 31 $1642 % difference 28 $1338 % difference 34 $1823 % difference 6 $1306 % difference 10 $1207 % difference 9 $1304 % difference 3 $1176 % difference 37 $1499 % difference 11 $1186 % difference 26 $1495 % difference Show all rows 2 How you can save on auto insurance
Improve your credit score Credit score Annual premium Poor $3,026 Average $1,865 Good $1,674 Excellent $1,487 Choose the right vehicle Model Annual premium BMW 330i $2,225 Toyota Prius $1,740 Toyota Camry $1,674 Honda Odyssey $1,454 Ford F-150 $1,442 Focus on your driving Incident Annual premium Convicted of a DUI $3,336 Involved in a car accident $2,405 Received a speeding ticket $2,029 Lapse in coverage $1,861 It is beneficial to understand your full financial picture and how your life events affect your car insurance premium, and then understand where you can earn savings. When searching for auto insurance savings, determining the discounts you are eligible for is important. Practice good driving habits
Half of the life events that impact car insurance premiums covered in this report directly relate to driving records: speeding tickets, car accidents and DUIs. Each incident can increase your auto insurance premiums significantly. In some states, rates are more accommodating to drivers with incidents on their driving records. Idaho, Vermont and Hawaii all have average rate increases lower than $200 per year for speeding tickets and $400 per year for car accidents, but this is still a huge impact on your budget. If you live in a state where premium increases for such incidents more closely mirror the national average range of about $350 per year to $730 per year, you might consider seeking out a defensive driver course approved by your insurance company that can offset these increases. Opting for additional coverages like accident forgiveness at the onset of your policy can also prevent rising rates due to accidents and traffic violations. Even drivers with clean records can find driving-based savings by opting for insurer-specific monitoring programs, which reward safe driving habits with additional discounts. Choose the right vehicle
The year and model of your vehicle are huge components of your insurance premium. In general, you can expect new and luxury vehicles to be more expensive to insure due to the higher cost of repair. A mid-range minivan such as Honda Odyssey costs $1,454 per year on average to insure with full coverage compared to a higher-end car, such as a BMW 330i, which costs $2,225 per year on average for the same level of coverage. When shopping for a vehicle, it is best to keep in mind how the vehicle you choose affects your insurance premiums. It may be helpful to get multiple quotes for different vehicles before buying to keep your overall insurance costs low. Relocate in your metro
Where you live within your city can impact your car insurance premiums. Although moving out of state to reduce your rate is impractical, drivers looking for auto insurance savings could consider moving either to a new city or a different ZIP code within your metro area. In Florida — where the True Cost Rank of 49 reflects the second-to-highest percentage of income going toward auto insurance — a driver could decide to offset insurance expenses by relocating from Tampa to Orlando, for an average savings of nearly $450 a year on car insurance premiums. Include your commute costs into savings calculations if possible. If moving to a new metro also reduces how far you drive on a daily basis, many companies offer discounts for putting fewer miles on your car. These discounts could enhance your potential savings. Improve your credit score
Having a high credit score can save you money unless you live in California, Hawaii or Massachusetts, where credit is not used to determine car insurance rates. Having good credit is especially important in metros like Detroit, Michigan, where low credit scores could result in additional premium costs of more than $5,000 a year, an 186% increase over the national average premium. If you plan to shop for a new auto insurance policy within the next six months to a year, avoiding credit checks could help keep your credit score in a range that provides you a more favorable car insurance premium. Hard credit checks, the credit pulls that typically occur when applying for a loan or credit card, typically negatively affect your credit score for some time after the credit check occurs. If your credit score is low, it may be beneficial to set up a monthly budget for your expenses to have greater insight into your finances. An insurance analyst for Bankrate.com, Stephen Kates, says, “The largest factor in your credit score is your payment history. Paying on time every time will make the biggest difference in your score over time. The second is credit utilization, which is the amount of credit you are using relative to the total amount you have available. If you are using more than 30% of your credit over a long period of time, your score can deteriorate. Using a credit monitoring system can help you keep tabs on your progress and catch any mistakes before they hurt your score.” While building your credit takes time, it can be worthwhile for auto insurance savings — the average full coverage premium in the U.S. for drivers with excellent credit is $1,487 a year. Prepare in advance for your teen
Because of their lack of driving experience, teens tend to be expensive to insure. The average married couple can expect to pay an extra $1,800 a year on top of their current insurance premiums after adding a teen driver. If you decide to purchase a vehicle for your teen, expect these insurance costs to be even higher. The best way to keep auto insurance costs down is to compare quotes from several providers when you add a teen to your policy. Another cost-saving measure is considering what kind of car your teen will drive; new cars typically cost more to insure and are more expensive to replace if damaged. Lastly, although it can be tempting to reduce insurance coverage to offset the added costs, teens are more likely to get into accidents. Purchasing more coverage can save you from paying more out of pocket if the worst should happen. Understanding the rating factors surrounding teen drivers can help you prepare to take advantage of discounts for a young driver. Many companies offer discounts to full-time students under 25 who maintain a B average on their report cards. Additionally, several companies offer discounts for driver training programs and safe driving habits. Keep in mind the increase for adding a teen will not last forever. You should see your premiums decrease over time as your teen gains more driving experience. 3 Where you can reinvest your auto insurance savings
Various factors go into determining your auto insurance rates, providing several areas of opportunity for you to save. Once you have found auto insurance savings, you can repurpose them to benefit other areas of your life. Bankrate’s True Cost Rank provides a way to break down the sum of your annual auto expenses and determine where adjustments might be needed to acquire additional savings. The returns may seem small at first but could have a significant impact on your long-term financial goals. Pay off your credit card debt
If you have credit card debt, using your newfound auto insurance savings to pay it down could be a wise choice. As credit scores also impact annual premiums, putting auto insurance savings towards paying off credit card debt could save you money on both immediately, with a reduced monthly debt repayment amount, and in the long-run with savings on your car insurance premium due to an increased credit score. Fund your 401 k
Putting savings into your 401(k) may not immediately feel beneficial, but letting your money grow over time can have a huge impact on your retirement fund. For example, even in New York where the true cost of auto insurance makes up 3.23% of your annual income, finding any savings on your auto insurance to offset these high premiums could help you contribute more towards a retirement fund. If you save at least 10% of a $60,000 annual salary (with half employer match up to 5%), you could earn over a million dollars in retirement savings after 35 years. Start a child s college savings fund
Tuition for even one child at a higher education institution is expensive, so it is never too early to start saving. A four-year college, for example, has the potential to be nearly 10 times more expensive than the highest average state car insurance premium, which is $2,724 annually in Louisiana. If you maintain a good driving record or move to a different ZIP code that offers a more favorable rate, you may be able to put the savings into a college fund to prepare for these high costs. If your child maintains good grades and qualifies for various auto insurance discounts, you could also put these savings toward your child’s educational future and decrease potential long-term loan debt. Invest in high-yield savings accounts
All savings accounts can be beneficial, but it may be even more impactful to open one that is designed to earn interest at a higher-than-average rate. High-yield savings accounts typically earn annual percentage yields at rates higher than regular savings accounts. Even by contributing just $100 a month from your premium savings into a high-yield account (with at least $10,000 at .50% APY) you could earn over $100 in interest after two years from just your auto insurance savings. Putting these earnings into an emergency savings fund could be a smart financial decision. An emergency fund can help to eliminate the need to use a credit card to cover emergency expenses, which may negatively impact your credit score and result in an increase in insurance premiums. Pay off your car loan
Interest on car loans can add up quickly and may even outweigh your initial loan amount if left to accumulate. By allocating car insurance savings to paying off loan debt, you could pay down your car sooner. The more aggressive approach to addressing your loan debt will not only add to your overall savings because of reduced interest payments but also eliminate your monthly car payment. For example, if you take that extra $400 a month in savings by improving your credit score and apply it to your car loan, you could pay an extra $4,800 a year towards your loan. No matter where you choose to reinvest your savings, understanding the true cost of car insurance can help you manage your overall financial well-being. By knowing how much you spend on auto insurance premiums each year, understanding how different life events can impact these expenses and being able to pinpoint savings opportunities, you can better prepare your financial future. Meet the author
Mariah Posey is an insurance writer and editor for Bankrate.com. She's originally from New Jersey and holds a bachelor’s degree in journalism from Elon University. Prior to joining the team, she worked as a copyeditor and writing consultant at her alma mater. Mariah has covered topics ranging from news to tech and lifestyle and has a vested interest in producing engaging content for audiences. Meet the editor
Cate Deventer is a writer, editor and insurance professional. She is currently pursuing a bachelor’s degree in English with a concentration in professional and technical writing from Indiana University East. She has nearly a decade of experience in the insurance industry as a licensed insurance agent, working mainly with personal auto, home and life insurance. Methodology
Bankrate’s study of the true cost of auto insurance evaluated 2021 rates across more than 35,000 ZIP codes. To understand the true cost of auto insurance for drivers, Bankrate analyzed the effect of multiple variables when added to the base profile. Quoted rates are based on a 40-year-old male and female driver with a clean driving record and good credit, driving a 2019 Toyota Camry and full coverage (100/300/50 liability, collision and comprehensive). These are sample rates and should be used for comparative purposes only. Your quotes may be different. Minimum coverage: To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually. Credit: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base), and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Incident: 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. Mileage: Rates were calculated by evaluating our base profile with an annual mileage of 12,000. 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). For new vs used vehicles, we also included the following years in our calculations: 2016, 2017, 2018, 2019 (base) and 2020. Status: Rates were evaluated based on the following marital/family status: single (base), married, married with a 16-year-old teen driver.