Do you know how much does car insurance cost in the US? On average, drivers pay between $1,500 and $2,500 per year for full coverage, or about $125 to $210 per month. Costs vary widely based on age, location, driving history, and coverage choices, making personalized quotes essential for accurate budgeting.
TL;DR (Quick Takeaways)
- Average annual cost: $1,500–$2,500 (full coverage).
- Monthly average: $125–$210; liability-only as low as $45/month.
- Top cost drivers: age, state, driving record, vehicle, and credit history.
- Premium prices vary widely across states.
- Smart moves: bundle policies, improve credit, raise deductibles carefully.
What it means: Understanding how much car insurance costs
When we ask “how much does car insurance cost” we usually refer to the average price drivers pay to maintain legally required auto insurance coverage in the US. Costs can be calculated annually or monthly, and vary by driver profile, vehicle type, coverage limits, and geographic location.
Why it matters
Car insurance isn’t just another bill—it protects your financial security. Without adequate coverage, a single accident can result in tens of thousands of dollars in out-of-pocket costs. Yet overpaying for unnecessary add-ons drains monthly budgets. Understanding real price ranges and cost drivers helps you balance affordability and protection.
Average costs and ranges
According to the National Association of Insurance Commissioners (NAIC), the national average annual premium for full coverage is $1,668, while minimum liability coverage averages $644 annually.
- Full coverage: $1,500–$2,500/year ($125–$210/month).
- Minimum liability only: $540–$900/year ($45–$75/month).
- High-risk drivers (accidents, DUIs): $3,000+/year.
| Coverage Type | Annual Average | Monthly Equivalent | Typical Range |
| Liability Only | $644 | $54 | $540–$900 |
| Full Coverage | $1,668 | $139 | $1,500–$2,500 |
| High-Risk Profiles | $3,200+ | $270+ | $2,800–$5,000 |
State variance: highest vs lowest costs
Where you live is one of the strongest predictors of price.
| Highest Average States | Annual Full Coverage |
| Michigan | $3,200+ |
| Florida | $2,800+ |
| Nevada | $2,400+ |
| Louisiana | $2,350+ |
| New York | $2,300+ |
| Lowest Average States | Annual Full Coverage |
| Maine | $950 |
| Ohio | $1,050 |
| Idaho | $1,100 |
| Wisconsin | $1,120 |
| Vermont | $1,150 |
(Sources: NAIC, state DMV reports, 2024 data.)
Top cost drivers with examples
Car insurance pricing isn’t random. Insurers weigh dozens of factors:
- Age & experience: A 19-year-old may pay $3,000+ annually; a 40-year-old with a clean record may pay $1,200.
- Location: Urban drivers in Miami face higher premiums than rural drivers in Iowa.
- Driving history: One speeding ticket can raise rates 15–20%. A DUI can double them.
- Credit score: Insurers in most states use credit to assess risk. Poor credit can add $500–$1,000/year.
- Vehicle type: A new Tesla Model Y costs more to insure than a Toyota Corolla, mainly due to repair and parts costs.
- Annual mileage: The more you drive, the more you risk—commuting 15,000 miles annually costs more than 7,500.
- Coverage level: Full coverage with high liability limits costs significantly more than the minimum state requirement.
How to reduce your premium without underinsuring
- Compare quotes annually. Prices change; loyalty doesn’t always save.
- Bundle policies. Home + auto discounts can cut 10–20%.
- Raise deductibles carefully. A higher deductible lowers monthly cost but increases out-of-pocket risk.
- Use telematics or safe-driver apps. Many insurers reward low-risk driving patterns.
- Maintain good credit. Even incremental improvements lower premiums in most states.
- Ask about discounts. From student GPA to military service, small perks add up.
FAQs (People Also Ask)
Q1. How much is auto insurance a month in the US?
On average, drivers pay $125–$210 per month for full coverage. Minimum liability can cost as little as $45–$75/month, depending on the state and driver profile.
Q2. How much is car insurance per month for a 20-year-old?
Young drivers face the highest rates. A 20-year-old often pays $250–$350 per month for full coverage, reflecting higher accident risk.
Q3. Why is my car insurance so expensive?
Premiums rise due to age, driving record, poor credit, expensive vehicles, or living in high-claim areas. Insurers calculate risk, and each factor pushes your premium higher.
Q4. What is the cheapest state for car insurance?
Maine, Ohio, and Idaho consistently report the lowest averages—around $80–$95 per month for full coverage.
Q5. Do I need full coverage?
Not always. If you own an older car outright, liability-only may be enough. But if you finance or lease, lenders typically require full coverage.
Q6. How often should I shop for insurance?
Experts recommend comparing quotes every two years or after major life changes (new car, move, marriage).
Glossary
- Premium: The amount you pay (monthly or annually) for coverage.
- Deductible: Out-of-pocket cost before insurance pays a claim.
- Liability coverage: Pays for damage/injury you cause others.
- Full coverage: Liability plus collision and comprehensive.
- Collision coverage: Repairs/replaces your car after an accident.
- Comprehensive coverage: Covers theft, vandalism, natural disasters.
- Telematics: Technology that tracks driving habits for discounts.
- Underwriting: Process insurers use to price risk.
- SR-22: Proof of insurance often required after serious violations.
- Exclusions: Situations your policy doesn’t cover.
Conclusion
Car insurance isn’t one-size-fits-all. The smart move is to compare options tailored to your profile—and revisit them every couple of years. With the Finhabits comparison tool, you can easily check quotes and choose the coverage that fits you best.
Sources
-
MarketWatch: Average Cost of Car Insurance in 2025
-
NerdWallet: How Much Is Car Insurance in 2025?
-
AutoInsurance.com: The Average Cost of Car Insurance in the U.S.
-
MoneyGeek: What Is the Average Cost of Car Insurance per Month and Year?
-
ValuePenguin: 2025 State of Auto Insurance Report
-
U.S. News & World Report: Why Are Car Insurance Rates Going Up?
-
Yahoo! Finance: Minimum Car Insurance Requirements in All 50 States
Disclaimer
This article is for informational purposes only and does not constitute legal or financial advice. Always consult your state’s DMV or a licensed insurance professional before making coverage decisions.
